Journal of Management Research

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Cancellation of Mergers and Acquisitions


Affiliations
1 Department of Management W. Frank Barton School of Business Wichita State University Wichita, KS 67206
2 Hagan School of Business Iona College, New Rochelle, NY 10801
3 Department of Finance University of Mississippi MS 38677
     

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This paper investigates the impact of a cancellation of a merger and acquisitions on the target firm. Using data from 1982 through 1992, the study examines the returns of sample firms concerning the announcement of a merger or acquisition cancellation. The results of this study suggest that the cancellation of an acquisition negatively impacts the market assessment of the firm around the announcement day. However, the findings suggest that the overall impact of the announcement, regardless of the cancellation, results in a significantly positive increase in value for the target firm.

Keywords

Merger, Acquisition, Cancellation Announcement
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  • Cancellation of Mergers and Acquisitions

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Authors

Timothy L Pett
Department of Management W. Frank Barton School of Business Wichita State University Wichita, KS 67206
John D Francis
Hagan School of Business Iona College, New Rochelle, NY 10801
Robert A. Van Ness
Department of Finance University of Mississippi MS 38677

Abstract


This paper investigates the impact of a cancellation of a merger and acquisitions on the target firm. Using data from 1982 through 1992, the study examines the returns of sample firms concerning the announcement of a merger or acquisition cancellation. The results of this study suggest that the cancellation of an acquisition negatively impacts the market assessment of the firm around the announcement day. However, the findings suggest that the overall impact of the announcement, regardless of the cancellation, results in a significantly positive increase in value for the target firm.

Keywords


Merger, Acquisition, Cancellation Announcement

References