The Effects of Mergers and Acquisitions on Taiwanese Corporations

Abstract

This paper investigated the impact of M&As on both the acquiring firms' stock prices and corporate performance by using evidence from 20 Taiwanese corporations. Our data suggest that the accounting performance of Taiwanese acquiring firms failed to meet the stock market's expectation of future improvements in the operations of the acquiring firms. The stock market reacted in favor of the announcements of M&As, however, there is a downward change in the acquiring firms' profitability from premerger to postmerger periods. However we do not find any significant correlation between stock returns and the change in accounting performance, which is different from some previous studies.

Investigating the Impact of Merger & Acquisition on Post Merger Financial Performance (Relative & Absolute) of Companies (Evidence from Non-Financial Sector of Pakistan)

“…The results of this study are that absolute & relative financial performance has been deteriorated following the merger event. The results of this study match with the results of study by Yeh and Hoshino (2000) in Taiwan which also concluded that return on equity & return on assets were decreased as compared to pre merger period. Likewise, these results also match with the study undertaken under Australian environment by Sharma and Ho Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.5, No.13, 2014 94 (2002).…”

“…However the study implies that cross border relation does not result in efficiency but little improvement in profitability. Yeh and Hoshino (2000) conducted study in Taiwan with an attempt to investigate the impact of merger on shareholder's wealth and firm performance of merged firms. The accounting based and stock return data was used to measure the impact of merger.…”

Post-M&A Operating Performance of Indian Acquiring Firms: A Du Pont Analysis

“…They have not observed significant improvement in post-acquisition operating performance. Yeh and Hoshino (2000) investigated the impact of mergers and acquisitions on both the acquiring firms' stock prices and financial performance by using a sample of 20 Taiwanese corporations during 1987-1992. They have examined accounting measures of profitability, financial health and growth of the acquirers.…”

THE IMPACT OF M&As ON SHAREHOLDER WEALTH: EVIDENCE FROM TAIWANESE CORPORATIONS

“…Source: FTC (1993-98 issues). As for Taiwanese M&As, several studies report positive abnormal returns for the shareholders of acquiring firms (Yen and Peng 1993;Huang and Huang 1995;Yeh and Hoshino 2000). However, the cumulated abnormal returns lack strong significance over the event period.…”