– Double spaced, with 12 point Times New Roman font and a minimum of 1” margin from all sides).
– For the full sample of M&A events, use the excel file, “MA events with CAR.”
– For the detailed description of variables, refer to the “GSIOnline_MA_Database_Manual.pdf.”
– For sample research papers, please read Sample 1, and Sample 2.
– Please add the reference list if you cite a paper or extract it from a website.
– You can obtain electronic copies of annual reports from EDGAR (Electronic Data Gathering, Analysis, and Retrieval; http://www.sec.gov/edgar/searchedgar/companysearch.html). EDGAR performs automated collection, validation, indexing, and forwarding of submissions by companies and others who are required by law to file forms with the SEC.
Part A. Short-term market reaction to the M&A – how do investors respond to M&A announcement?
Required: Prepare a 3 pages paper that summarizes your finding. Please spend pages1- 2 for writing and page 3 for tables or figures.
1. Introduction – Full-sample analysis
• Clearly define the full sample events provided (time period, data source: GSI online)
See Sample 1 (section 2. Sample Selection) as an example of defining the sample.
• Summarize the statistics (n, mean, first quartile (25%), median (50%), third quartile (75%)) of the two-days cumulative abnormal return from the announcement date (CAR01) for the acquirer.
2. Main – Sub-sample analysis
• Choose any sub-sample based on the variables provided (e.g., time period, deal specification, transaction value, etc.). Pick 50 M&As from the sub-sample.
• Clearly define your sub-sample.
• Summarize the statistics of CAR01 for the acquirer.
• Compare the mean and median of CAR01 of your sub-sample and the full sample.
3. Conclusion – Interpretation and discussion of your findings (i.e., why does your sub-sample show higher or lower M&A announcement return compared to the full sample?).
Part B. Are M&As successful in the long-term?
Required: Prepare a 2 pages paper that answers the following questions as much as you can.
Pick one M&A event from the excel file or from your search.
– What is the type of M&A?
– What are the expected benefits of the M/A? (e.g., any synergy effects)
– How did the acquirer account for the acquisition (goodwill/gain)?
– How did the acquiree account for the acquisition (gain/loss)?
– Are there any details/disclosures about the valuation of assets & liabilities?
– How does operating performance change in the long-term? (e.g., EPS, ROA/ROE changes before and after the M&As)
– Are M&As successful in the long-term?
Students are required to find actual disclosures (news articles and SEC filings). You can find the SEC Form “425” or “8-K” after the announcement date. Example: https://www.sec.gov/Archives/edgar/data/41499/000116923205000340/d61995_425.htm