M&A in the Construction Industry -Wealth Effects of Diversification into Real Estate Life Cycle Related Services

Since the late 1990s, the construction industry has undergone a change in business model, as contractors vertically expand their operations to other parts of the real estate life cycle. The question arises on whether construction companies have superior abilities as real estate service providers. We have examined the value implications of 106 large merger and acquisition (M&A) transactions in the construction industry worldwide from 1986 to 2006. We inquire if a vertical expansion of the construction value chain in the real estate life cycle through M&A leads to the creation of shareholder value. We find out that this is not the case. M&A success is mainly determined by industry-specific size effects and common agency conflicts.Construction industry; Cross-border acquisitions; Bidder gains; Global diversification

Consolidation and Market Power of Energy Utilities - The case of US-American and German Utility Takeovers

Between 1990 and 2002 a wave of takeovers was observed in the North American and European energy utilities market. We analyze the impact of these takeovers on market power, studying 70 takeovers of US-American and 69 takeovers of German energy utilities by applying event study methodology. Stock price reactions of acquiring and target firms as well as of their competitors are used as an indicator for market power. While we do not find any significant results pointing in this direction for transactions in the US, our findings clearly indicate that the potential to increase market power is indeed an important motive for takeovers within the German energy utilities market.acquisitions, energy utilities, market power, oligopoly, regulation

Kontrolldefizite bei den Kapitalbeteiligungsgesellschaften der Sparkassen

In den letzten Jahren haben öffentlich-rechtliche Kreditinstitute zunehmend Kapitalbeteiligungsgesellschaften gegründet. Wie sind diese unter Corporate Governance Gesichtspunkten zu beurteilen? Gibt es Kontrolldefizite bei den Beteiligungsgesellschaften? Können dort anreizkompatible Überwachungsinstrumente zum Einsatz kommen? --

Banking market consolidation in Asia:Evidence from acquirers, targets, and rivals

We analyze the financial sector consolidation in Asia by using a comprehensive sample of bank M&As from 1995 to 2021. Our results show that M&A announcements by Asian domestic acquirers are associated with significant positive stock price returns to both acquirers and their rivals. In contrast, cross-border acquirers and their rivals experience negative but insignificant returns, while targets and their rivals record gains, regardless whether it is a domestic or cross-border transaction. Further analyses reveal that domestic acquirers obtaining larger relative increases in their market share benefit the most, indicating that market power considerations are the primary driver behind acquirers' positive returns. For cross-border acquirers, neither cultural differences nor regulatory arbitrage considerations can explain return patterns surrounding M&A announcements

Mergers and Acquisitions in the Software Industry Research - Results in the Area of Success Determinants

This paper analyzes approaches investigating success drivers of mergers and acquisitions (M&A) in the software industry. The literature review covers a classification of research papers in the generic and software industry specific M&A research discipline. The results accentuate that the impact of success factors depends on the research context and that many factors have not been examined so far with respect to the software industry. Building on these insights, the resulting areas for research are pointed out. The investigation of software industry specific factors, in particular, promises to contribute to the analysis of variance in M&A performance

Returns On Large Stock Price Declines And Increases In The South African Stock Market: A Note On Market Efficiency

This study tests for underreaction and overreaction in the South African stock market by examining abnormal returns on the stocks included in the FTSE Group Johannesburg Stock Exchange Top 40 index following large price rises and drops. The results of our empirical investigation suggest that large price increases and declines are likely to be followed by positive market returns. In addition, for the post-2008 time period the risk of these stocks increases significantly for up to two years following the original event. Therefore, the results lend further support to the Uncertain Information Hypothesis

Information or noise: How Twitter facilitates stock market information aggregation

We assess the relevance of Twitter for stock-relevant information dissemination in financial markets on the single stock level. We use a unique dataset including more than 12 million Twitter feeds linked to specific firms. Using intraday data for the computation of advanced trading metrics, such as effective spreads, intraday volatility, and a daily version of the microstructure variable probability of informed trading (PIN), we measure the impact of Twitter activity on trading and information dissemination. The PIN model indicates that more uninformed than informed traders rush to the market along with rising Twitter activity. These results indicate that Twitter serves as an excellent indicator of news that is relevant for the stock market. However, we show that Twitter does not lead traditional news channels. In contrast, Twitter activity follows the market and has no predictive power with regard to future stock trading volume or volatility on the single stock level

Estimating Crypto-Related Risk: Market-Based Evidence from FTX’s Failure and Its Contagion on U.S. Banks

We use historical covariance between stock returns of U.S. banks and bitcoin returns to estimate a sensitivity measure that captures crypto-related risk in financial institutions. The measure effectively explains cross-sectional stock returns of 219 U.S. based financial institutions in response to the failure of FTX on November 11, 2022. Overall we document negative contagion effects on the market valuation of U.S. banks. We further show that this risk measure is unrelated to variables that have been used to explain operational risk in previous literature, i.e., corporate governance and business complexity. However, we document a significant relation with bank liquidity as measured by the Tier 1 capital adequacy ratio. We conclude that, on average, it is the banks with sufficient liquidity reserves that venture into the crypto sphere. Our approach offers individual investors and customers the opportunity to leverage market efficiency to evaluate the idiosyncratic level of crypto-related risk in a financial institution