Acquired Firms; Long-Performance; Type of M&A; Purpose of Takeover; Strategic Motives
무역연구, v.10, no.5, pp.593 - 614
The purpose of this study was to empirically examine long-term performance of acquiredfirms in the Korean stock market. In addition, the differences between long-term performancewith the type of M&A and the purpose of takeover were explored. The sample size consistedof 135 domestic firms acquired during the period from 2000-2007. The following results wereobtained. At first, short-term positive excess return was realized by acquiring firms tendingto pay higher premium. However, the excess return was reduced in the long run. Second,long-term operating performance generally worsened after the takeover. Third, acquired firmsof In-In type M&A had higher excess return around the announcement date, but the excessreturn was greatly reduced in the long run. There was no difference in BHAR and CAARrelative to the purpose of takeover. Fourth, regardless of type of M&A and purpose oftakeover, long-term operating performance of each firm worsened after the takeover. Finally,there was no significant change of capital expenditures and R&D expenditures of acquiredfirms after the takeover. This result suggested that long-term investment and performancewere influenced by strategic motives of the takeover for acquired firms.