Operating performance following mergers and acquisitions

Abstract

We investigate the long-term operating performance of corporate mergers and acquisitions of 133 acquiring companies in Norway from year 2000 to 2020. We employ three different methods and four different measures of operating performance that allow us to compare and overcome several measurement limitations of previous literature. Acquiring companies significantly outperform the median peers in their industry prior to the acquisitions. However, this difference becomes less significant after the performance of the matched companies that are chosen to control for size and pre-event performance is controlled. For all models employed, we find no statistical evidence of improvement in operating performance following M&A activity.