Kauppakorkeakoulun julkaisuportaali
Aalto-yliopiston kauppakorkeakoulun gradujen tiedot nyt Aaltodocissa: Aaltodoc-julkaisuarkisto
Kauppakorkeakoulu | Laskentatoimen ja rahoituksen laitos | Rahoitus | 2008
Tutkielman numero: 12014
The impact of government ownership in mergers and acquisitions
Tekijä: Haavisto, Ilkka
Otsikko: The impact of government ownership in mergers and acquisitions
Vuosi: 2008  Kieli: eng
Laitos: Laskentatoimen ja rahoituksen laitos
Aine: Rahoitus
Asiasanat: rahoitus; financing; yksityistäminen; privatization; yrityskaupat; corporate acquisitions; fuusiot; mergers; tuotto; rate of return; omistus; ownership
Sivumäärä: 74
Avainsanat: merger; acquisition; privatization

The purpose of this study is to evaluate the change in shareholder value when privatized companies conduct mergers and acquisitions. I calculate the cumulative abnormal return for the acquirer, target and the combined entity around the takeover announcement date. In addition, I construct regression models to quantify the company and deal specific issues that affect the cumulative abnormal returns. In order to compare the activities of the privatized companies, I construct a control group to which I compare the results.


The information about the privatized companies has been obtained from the Helsinki School of Economics’ Finance Department, this dataset includes 248 companies. In addition, I have collected the historical ownership data manually for all these companies. The control group consists of 248 largest companies in the Dow Jones STOXX Global 1800 –index, excluding any overlapping companies with the main sample. The mergers and acquisition data is from SDC and share price data from Thomson Datastream.


My findings show that the cumulative abnormal return for acquirer in both samples, SIP and control sample, is negative around a takeover announcement date. In addition, I find evidence of target run-up and show that the takeovers create value for the combined entity. I also show that the government’s ownership stake does not statistically significantly affect to the cumulative abnormal returns the acquiring companies, that are partly owned by the state, experience. In addition, I show that the privatized companies make statistically significantly more cross border deals than companies in the control sample. The takeovers are also smaller and attract less interest from multiple bidders. The takeovers in both samples are motivated by synergy and hubris.
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