Page 92 - Azerbaijan State University of Economics

N.V. Abdullayeva: Value creation through mergers and acquisitions in energy sector

Majority of empirical studies confirms that big share of financial gains during

M&A transaction go to the target companies. It is difficult to determine exact causes

of this phenomenon. Some researchers refer to ―winner‘s curse‖, while others blame

on management who pay larger value for the target companies in order to sustain

inorganic company growth.

References

[1] Andrade, Gregor& Mitchell, Mark & Stafford, Erik. (Spring 2001). New

Evidences and Perspectives on Mergers. Journal of Economic Perspective.

Volume 15.

[2] Asquith P. (1983.).Merger Bids, Uncertainty, and Stockholder Returns. Journal

of Financial Economics, 11, pp.51-83.

[3] Chari A., Ouimet P.P. and Tesar L.L. (2004). Acquiring Control in Emerging

Markets: Evidence from the Stock Market.

[4] Corrado, C.J., A non parametric test for abnormal security price performance in

event studies, Journal of Financial Economics, v. 23, p. 385-395, 1989

[5] Cowen, A.R., Sergenat, A.M.A., Trading frequency and event study test

specification, Journal of Banking and Finance, 20, 1731-1757, 1996.

[6] Hassan Tehranian et al. Management Compensation Contracts and Merger-

Induced Abnormal Returns pp.63-70

[7] Fama, Eugene F., and Kenneth R. French, 1997, Industry costs of equity, Journal

of Financial Economics 43, 153–193.

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