Determinants of Merger & Acquisition success in global logistics

Abstract

The logistics industry has experienced a strong consolidation since the early 1990s. In this paper, the value implication of 200 logistics mergers and acquisitions (M&A) that have taken place between 1991 and 2006 is analysed by applying event study methodology. The impacts on acquirers, targets, and combined entities are examined and it is determined that significant positive abnormal returns can be realised. By assessing subsamples according to transactionbased success factors, it has been identified that operationally focusing transactions within the same product market are more successful than those that follow a diversification strategy. Crossborder mergers outperform national mergers within the same regional market. Transactions with a large volume are more successful than small ones.

Event studies: A methodology review

“…Schwert (1981) is an early example. A parsimonious, recent sampling of papers in various areas where event studies are now applied might include Ghosh et al (1995), Meznar et al (1998), Lamdin (2001), McKenzie and Thomsen (2001), Bhagat and Romano (2002), Chatterjee et al (2002), Nicolau (2002), Rose (2003), Thomsen and McKenzie (2001), Drakos (2004), Nicolau and Sellers (2002), Wulf (2004), Tuck (2005), Cichello and Lamdin (2006), Fornell et al (2006), Calvo-Gonzalez (2007), Johnston (2007), Darkow et al (2008), Gong (2009), Misra and Rao (2009), and Roztocki and Weistroffer (2009). There are, of course, many others too numerous to mention here.…”

The impact of mergers and acquisitions on shareholders' wealth in the logistics service industry

“…Moreover, the post-merger performance seems highly dependent on the corresponding industry (Campa and Hernando, 2004). The impact of M&A in the logistics service industry in terms of stock market reaction after the announcement and post-merger performance however, has, with the exception of Darkow et al (2008) for the period 1991period -2006period and Andreou et al (2012 for the U.S. market that both focus on short-term effects, not been considered so far. Consequently, the paper at hand takes up this issue by analysing a sample of 826 transaction announcements taken place between 1996 and 2015 and their performance effect in terms of short-and longterm abnormal shareholder returns to identify the conditions for successful M&A in the logistics service industry.…”

A survey of shipping finance research: Setting the future research agenda

“…It is possible that this divergence can be attributed to differences in the regions examined, time periods and event windows employed in the two studies. In fact, some findings in Darkow et al (2008) Darkow et al (2008) and Andreou et al (2012), the study documents that both acquirers and targets realise positive CARs of 1.2% and 3.3% over the 4 day [-3, +1] around the deal announcements. Moreover, a particularly compelling result in this study is the outperformance of acquisitions of publicly listed targets compared to those of private companies.…”

“…There are three recent studies that provide more comprehensive evidence based on larger samples. Darkow et al (2008) investigate value creation from 200 M&As between logistics companies that took place globally for the period 1991-2006 and report that both acquiring and target companies achieve positive 3 day CARs of roughly 1.6% and 10.6%, respectively. 36 Moreover, the synergistic gains, proxied for by the value-weighted average of acquirer and target abnormal returns, are larger for horizontal, cross-border and larger deals.…”

“…They report CARs to acquiring and target companies of 2.3% and 24.5%, respectively, during the event window [-10, +1]. In contrast to Darkow et al (2008), they document that vertical integration yields higher synergistic gains relative to horizontal consolidation. It is possible that this divergence can be attributed to differences in the regions examined, time periods and event windows employed in the two studies.…”