Journal of Management Research
  • Year: 2003
  • Volume: 3
  • Issue: 1

Cancellation of mergers and acquisitions, implications for target firms

  • Author:
  • Timothy L Pett1, John D Francis2, Robert A Van Ness3
  • Total Page Count: 10
  • Page Number: 1 to 10

1Department of Management, W. Frank Barton School of BusinessWichita State University Wichita, KS 67206

2Hagan School of Business Iona College, New Rochelle, NY 10801

3Department 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