Performance Evaluation of UK Acquiring Companies in the Pre and Post-Acquisitions Periods

Khurshid Ali, Zeeshan Khan, Numan Khan, Abdul-Hamid Ibrahim Alsubaie, Fazal Subhan and Moumen Kanadil

Asian Journal of Economics and Empirical Research, 2016, vol. 3, issue 2, 130-138

Abstract: This paper has two objectives: first, it examines the financial performance of twenty UK based acquiring companies over the period of five years (2009-2013) using financial ratios of Liquidity, Profitability and Solvency in order to empirically determine whether there is any significant financial performance changes in the operation of the underlying companies as a result of acquisitions. Both average ratio and paired t-test analysis have been conducted. The analysis concludes that none of the ratios proved statistical significance which shows that the underlying acquisitions did not influence changes in the financial performance of the acquiring companies. The paper also examines whether shareholders make short-term gain while opting for acquisitions by analyzing stocks return over 58 days window period i.e. 29 days prior to acquisition announcement and 29 days after acquisition announcement by applying CAPM model and AAR and CAAR analysis. The analysis concludes that none of the results show statistical significance which further asserts that UK shareholders do not make gain in the short-term as a result of the acquisition activities they have undertaken.

Keywords: Financial Performance; Liquidity; Profitability; Solvency; Acquisition; CAPM; AAR; CAAR. (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://asianonlinejournals.com/index.php/AJEER/article/view/220/197 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aoj:ajeaer:v:3:y:2016:i:2:p:130-138:id:220

Access Statistics for this article

More articles in Asian Journal of Economics and Empirical Research from Asian Online Journal Publishing Group
Bibliographic data for series maintained by Sara Lim ().