An investigation of market reaction differences between mega-deals and non–mega deals considering industry concentration

Zaihan Gao and Yue Bao

Finance Research Letters, 2023, vol. 51, issue C

Abstract: This study investigates the performance of mega-deals and non-mega-deals and the role of industry concentration level. Our research finds that while non-mega-deals tend to have better short-term performance, mega-deals are more likely to perform better in the long term. In addition, a higher industry concentration plays a positive role in the short- and long-term performance of both mega-deals and non-mega-deals. However, its effect on long-term performance is not as pronounced, especially in the case of mega-deals. A lower industry concentration implies more competition, which may lead to a higher offer premium and adversely affect stockholders in the short term.

Keywords: M&A deals; Mega-deals; Deal performance; Industry concentration (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:51:y:2023:i:c:s1544612322006183

DOI: 10.1016/j.frl.2022.103441

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