Impact of mergers and acquisitions on stock prices: The U.S. ethanol-based biofuel industry

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• 作者：Aditya R. Khanal ; Ashok K. Mishra ; Kh. A. Mottaleb
• 关键词：Biofuel ; Ethanol ; Event analysis ; Bioenergy ; Mergers ; Acquisitions
• 刊名：Biomass and Bioenergy
• 出版年：February, 2014
• 年：2014
• 卷：61
• 期：Complete
• 页码：138-145
• 全文大小：446 K

文摘

Corporate restructuring activities in the form of mergers and acquisitions (M&As) are ongoing in the U.S. ethanol-based biofuel industry. With regard to M&As, a widespread concern is about financial performance of an individual firm and stable financial performance of the overall industry. Using an event analysis method, this study explores the impact of recent M&As on stock prices and value of the firm of publicly traded ethanol-based biofuel industry between 2010 and 2012 in the United States. Results regarding the average cumulative abnormal returns of acquiring firms suggest that the market positively responded toward recent M&As in the industry. Around 4% positive growth on a 60-day event window was attributed to M&As using market-adjusted market portfolio. A significant positive 0.47% gain in cumulative returns in a 4-day event window and a 2.7% positive gain in a 10-day event window were suggested by this study.