This dissertation was written as part of the MSc in International Accounting, Auditing and Financial Management at the International Hellenic University. The purpose of this study was to examine the abnormal returns to shareholders of the companies engaged in the M&As around the day of the first public announcement. Our analysis was focused on M&As in the automotive sector for the period 2008-2018 and we explored whether the market reacted differently on horizontal M&As than on vertical ones, conducting the event study methodology on abnormal returns. We found that investors highly reacted to the announcement of a deal either positively or negatively depending on their expectations regarding the deal and information leakages may be the reason for the existence of abnormal returns before the announcement date. In the case of vertical M&As, positive statistically significant CAARs found in several windows for both the bidder and target company while in horizontal M&As negative statistically significant windows estimated based on market model. Finally, accounting-based analysis was employed to examine the post-M&A profitability performance of the acquiring firms based on specific financial ratios. Analysis showed that there was no statistically significant improvement of ROE and Profit Margin Ratio in a period of two years following the M&A.
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