Journal

Volume 72, #1

    “Economic Sciences: theory and practice” is scientific, refereed, biannual journal. The Journal of “Economic Sciences: theory and practice” has been founded by Azerbaijan State University of Economics in 1994.              
The Journal has been received to registration in the centre of international ISSN (International Standard Series Number, ISSN-2220-8739). Also, it has been included by the Supreme attestation Commission under the President of Azerbaijan Republic to the list of scientific publications on economic sciences.


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Value creation through mergers and acquisitions in energy sector

Nigar Vidadi Abdullayeva Lecture, MBA Departament, UNEC


Abstract
In today-s challenging business environment, companies need to grow to be competitive on the market. Mergers and acquisitions (M&A) remains a key growth strategy for companies. This research is focused on examination of short term wealth effects of mergers and acquisitions (M&A) on shareholders. The aim of the study was to find out if M&A have any effect on financial performance of participating companies. The event study methodology was applied to investigate 100 deals in energy sector, particularly in oil and gas industry engaged in M&A activity from 2000 to 2014. The results of the study confirm that target companies gain shareholder wealth by exhibiting significantly positive cumulative abnormal returns. Interestingly, obtained results showed negative impact of M&A announcement on acquirer’s stock performance. Findings are in line with previous studies of Andrade et al. (2001), Bradley et al. (1988), and Jensen and Ruback (1983).

Keywords: Mergers and acquisitions (M&A), energy sector, oil and gas, business environment, shareholders.

JEL Classification Codes: G34, G39