Value Creation in M&A: Short- and Long-Term Evidence from Swedish Acquirers

Sammanfattning

This study examines whether mergers and acquisitions (M&A) conducted bySwedish listed firms create shareholder value in the short and long term. Usinga sample of 737 transactions between 2010 and 2024, short-term performanceis analyzed using event study methodology, while long-term performance isassessed using a calendar-time portfolio approach based on the Carhart fourfactor model. The results show that acquiring firms earn positive and statistically significant abnormal returns of approximately 2.9% around the announcement date, indicating that acquisitions are perceived as value-enhancing. Nosignificant abnormal returns are observed over longer horizons, suggesting thatthe expected value of acquisitions is incorporated into prices at announcement.Cross-sectional analysis identifies relative deal size and deal sequence as theonly consistent determinants of announcement returns. Payment method doesnot robustly explain announcement returns, with no statistically significant difference between cash- and stock-financed deals, contrary to the predictions oftraditional signaling theory