Title: Do single takeovers outperform corporate acquisition programs? Evidence from the French stock market

Authors: Omar Boufama; Elena Rogova

Addresses: 20 August 1955 University, Building H5, Bel-Air City, 21000, Skikda, Algeria ' Saint Petersburg School of Economics and Management, National Research University Higher School of Economics, 3, Kantemirovskaya Str., 194100, Saint Petersburg, Russia

Abstract: This paper compares the profitability of French acquiring firms following the launch of corporate acquisition programs with that of single takeovers, by examining wealth of acquirers in both cases. While using the event study methodology for the calculation of abnormal returns for single takeovers, this study also considers the model of partially anticipated events for the assessment of the economic impact and the announcement effect of acquisition attempts. For the acquisition programs, we used a sample containing 46 French active acquirers, which launched 97 acquisition attempts between 1997 and 2007. For single takeovers, we examined 23 acquisitions by the same acquirers. The results of this study show that French investors obtain positive returns during and around the month of takeover announcement. French acquirers earn an average of 3.75% in two months, the month of announcement and the following month, and 4.02% in the month of announcement and the month preceding the announcement. These results show that single takeovers outperform corporate acquisition programs, since these same French acquiring firms do not generate any profitability following the launch of these investment programs.

Keywords: takeovers; acquirers' returns; corporate acquisition programs; abnormal returns; French acquirers.

DOI: 10.1504/IJBPM.2021.116411

International Journal of Business Performance Management, 2021 Vol.22 No.2/3, pp.291 - 308

Received: 14 Jun 2020
Accepted: 21 Oct 2020

Published online: 16 Jul 2021 *

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