Value creation in mergers and acquisitions: the market sentiment influence / Criação de valor em fusões e aquisições: a influência do sentimento de mercado


IBICT - Instituto Brasileiro de Informação em Ciência e Tecnologia




Mergers and Acquisitions (M&As) finance literature is vast and extensive, being one of its main themes of research the value creation (or destruction) determinants in these processes. More recently, with behavioral finance theory development, the market condition (bull or bear market) during M&As announcements has increasinly attracted researches attention. Continuing Bouwman, Fuller and Nain (2009) and Batista and Minardi (2010) who have already studied this topic, this paper intends to determine whether the market sentiment (bull market or bear market) by the time of M&As are announced influence the value created for acquiring companies shareholders. This research analyzes, mainly by cross section regressions, the events announced between 2001 and 2011 for companies listed at Bovespa and differs from previous works by (i) considering a robust identification and controlling process of events whose results can be affected by other unrelated events, (ii) proposing different proxies for determining the market sentiment (condition), (iii) conducting methodological variations in order to assess the results robustness and (iv) extending empirical studies in the area by analysing recent F&As events. The results seem to vary and to dependent on the methodology employed. When events with possible confounding effects are excluded, in most results there is no statistically significant evidence that the market sentiment is related to value creation. Nevertheless, results obtained for the sample containing all events (but controlled for confounding effects) indicate, in most cases with statistical significance, that there is a relationship between the market sentiment and value creation, which seems to be higher during bear markets. This study is also useful to show that results also depend on how market sentiment is defined (which market sentiment proxy is adopted). Even when the proxy employed is not changed, results also seem to change depending on the threshold defined in order to segment market sentiment. In the other hand, results seem to be generally consistent regardless of the market proxy employed to estimate value creation (Ibovespa and IBRX-50) and regardless of the exclusion of potential outliers.


corporate mergers and acquisitions fusão e aquisição de empresas value - business administration corporate finance finanças das empresas valor - administração

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