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M&A in ASEAN countries (Several hypotheses to
understand the…
M&A in ASEAN countries
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Data and methodology
Sample selection
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The details of each transaction were extracted from the
SDC Platinum of Thomson Financial Securities Data Worldwide Mergers and Acquisitions Database
We also eliminate transactions from multiple bidders
who are involved in more than one deal over the sample period
The data includes transaction value, percentage of shares acquired and owned after
the transaction, country and industry of each bidder and target, deal attitude and mode of payment
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Sample description
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The level
of cash reserves is fairly distributed among deals and that M&As completed by cash-rich bidders are not uncommon.
There is an equal distribution between majority deals where
bidders end up owning more than 50% of the target and minority deals where less than 50%
of the target is controlled after the M&A
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Deal characteristics
The adjusted profitability does not differ significantly between cash-financed and stock-financed M&As
Focusing M&As are not able to generate more
synergistic benefits for merging firms than diversifying ones
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Geographic scope of business expansion does not help explain the sequent changes in post-M&A performance in ASEAN
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Results for the percentage acquired do not provide any evidence that majority deals significantly outperform minority deals
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Cross-sectional analysis
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During bad economic times, ASEAN firms should concentrate on diversifying M&As within their own borders
During crisis, a large amount of
cash holding is particularly detrimental for acquirers
ASEAN firms are able to generate extra performance
from friendly M&As with large targets only during the crisis period