The Study of Events Approach Applied to the Impact of Mergers and Acquisitions on the Performance of Consulting Engineering Companies

Marcos Albuquerque Junior, José António Filipe, Paulo de Melo Jorge Neto and Cristiano da Silva
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Marcos Albuquerque Junior: Iscte-Instituto Universitário de Lisboa, 1649-026 Lisboa, Portugal
José António Filipe: Departamento de Matemática, Iscte-Instituto Universitário de Lisboa, ISTAR-Iscte, BRU-Iscte, 1649-026 Lisboa, Portugal
Paulo de Melo Jorge Neto: Center for Advanced Studies in Economics CAEN-UFC-Department of Economics, Federal University of Ceará, Fortaleza 60020-180, Brazil
Cristiano da Silva: Department of Economics of the University of the State of Rio Grande do Norte, Graduate Program in Economics-EPP/UERN, Mossoró 59610-210, Brazil

Mathematics, 2021, vol. 9, issue 2, 1-20

Abstract: Recent research suggests that one of the main motivations for mergers and acquisitions is the attempt to acquire companies to incorporate intangible assets. Such assets provide important sources of sustainable competitive advantages and opportunities for growth. This article analyzes the strategies of engineering companies, as well as value creation in acquisition events of multinational companies, by using the study of the events method, providing an innovative way to be applied to this phenomenon. This method is used in our research to study the influence of the announcement of acquisitions on the abnormal accumulated returns of the acquiring companies, and is allowed to confirm that influence. In general, the average accumulated returns were positive and statistically significant in the three windows of the method, according to the significance tests used. The results validate the hypothesis that the events generate synergy gains for market players, emphasizing the importance of growth via acquisitions for the sector under analysis.

Keywords: company acquisition; event study; accumulated abnormal return; synthetic control method; increased synergy; value creation (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2021
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