Merger and acquisition performance: Evidence from Norway

Abstract

This event study examines how acquiring firms’ stock price react to merger and acquisition announcements. I use data from the Norwegian market, and have identified a total of 423 M&A deals, carried out by a total of 97 firms, between 2007 and 2021. This study is performed by examining daily abnormal returns (AR) and cumulative abnormal returns (CAR) in what is define as the event period consisting of 21 days surrounding the announcement day. I also define an estimation period, consisting of 180 days prior to the event period. A simple market model is used to estimate abnormal returns, which is fitted in the estimation period, and used to estimate abnormal returns out of sample. I find that the M&As on average added value for the acquiring company’s shareholders in our sample, but the statistical significance of the results are weak.