In order for a company to participate in mergers an
d acquisitions apart from
personal motives whether economic or strategic reas
ons should exist. Ultimate
goal for the activity associated with economic reas
ons is the value creation for the
acquiring firm’s shareholders by realizing synerg
ies through cost deduction and
increased revenues. Strategic reasons summarize the
management’s policy to
hedge against risks deriving from volatility and pr
evailing conditions within the
industry and/or the area that the acquiring firm op
erates.
An abundance of
researches suggests that a merger transaction does
not offer the desirable returns, at
least to the shareholders of bidding firms which ar
e expected to receive negative or
zero returns. Despite past evidence, new finding de
riving from the pharmaceutical
sector indicate positive abnormal returns to acquir
er. Our analysis resulted in negative
CARs for the most examined event windows allowing h
owever for further investigation
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