Do acquiring firms achieve their mergers and acquisitions objectives? Evidence from Japan

Yoshiaki Amano

Accounting and Finance, 2022, vol. 62, issue 2, 2905-2945

Abstract: This study assessed whether acquiring firms achieve the objectives of mergers and acquisitions (M&A) that are presented in their press releases and financial statements. It examined the usefulness of disclosing the M&A objectives to investors by analysing a sample of 232 M&A conducted between Japanese firms. The findings show that disclosed M&A objectives regarding profitability, efficiency, and growth are not usually realised. The results also show that describing M&A objectives in financial statements leads to higher short‐term stock returns while the stock market adjusts the valuation of firms based on their actual performance in the long run.

Date: 2022
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