The purpose of this study is to examine whether an acquiring firm that operates as a contractor within the defence sector can expect to generate shareholder value from a merger and acquisition with a fellow defence sector competitor. Having selected thirty acquiring defence firms an event study utilizing the market model is performed to obtain the abnormal returns generated from a merger and acquisition. To account for estimation problems associated with financial data, and to provide accurate and robust results, the GARCH and EGARCH model are also utilized alongside a basic OLS estimation. The results indicate a positive shareholder value creation for acquiring defence sector firms
