Impact of Domestic M&A on Acquirer Shareholder`s Equity: Evidence from Oslo Stock Exchange
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- Master's theses (IMT) 
The clear majority of research studies that has been conducted in the field of mergers and acquisition (M&A) are performance studies of acquirer post-M&A. Researchers has tried to get an insight into whether an M&A deal has had a positive or a negative effect on the acquiring company. In addition, most of these studies have been conducted on the US and UK market and hence the author wish to contribute to the existing literature by performing a specific study on the Norwegian market. In the following thesis, I examine the short-term/immediate impact of selected domestic mergers and acquisition (M&A) deals on acquirer`s shareholder`s equity in the Norwegian market and I also examine whether this impact is influenced by the method of payment. The author follow in the footsteps of numerous empirical researchers in the field of M&A and use event-studies to evaluate the performance of Norwegian M&A deals. The analysis investigates the Cumulative Abnormal Return (CAR) that measures a stocks unexpected returns and thus can be understood as the stock`s market reaction to the M&A announcement. The interpretation of CAR is that the stock price will on average react positively to M&A announcements when the Cumulative Average Abnormal Return (CAAR) and Average Abnormal Return (AAR) is greater than zero and statistically significant. The analysis considers selected domestic M&A deals on the Norwegian market in the period of 1995-2015 which add up to 38 deals that fulfills specific criteria`s. HYPOTHESIS 1: Cumulative Average Abnormal Return (CAAR) is positive in the event-window The results for CAAR show conflicting results and only significant values for the event-window of [-10, 10] and [-1, 1]. Due to significant conflicting results, Hypothesis 1 cannot be supported and hence the author has not been able to conclude whether Norwegian domestic M&A deals has created value or not. HYPOTHESIS 2: Average Abnormal Return (AAR) is positive around the announcement date [0, 1] The results for AAR shows that we have high statistically significant positive AAR around the announcement date. This indicates that the market views the M&A activity positively and hence Hypothesis 2 is supported. HYPOTHESIS 3: Cash-only deals are positively related to CAAR HYPOTHESIS 4: Mix-deal are positively related to CAAR The results are not in line with the theoretical discussion in this thesis and not what the author would have expected. The results show that cash-only deals underperform both stock-only and mix deals. Unfortunately, the results are not statistically significant and thus Hypothesis 3 and Hypothesis 4 are not supported.