The Impact of Mergers and Acquisitions on Shareholder Value

Abstract

This study investigates the impact of mergers and acquisitions (M&As) on shareholder value by integrating event study methodology, regression modeling, and qualitative case analysis into a mixed-method framework. Using a global dataset of transactions , cumulative abnormal returns (CARs) were analyzed around announcement dates, while regression models examined the effects of deal size, payment method, leverage, and cross-border status. The results indicate that target shareholders consistently realize positive abnormal returns, driven by acquisition premiums, whereas acquirer shareholders experience mixed outcomes contingent upon transaction characteristics. Larger and cash-financed deals were associated with greater shareholder wealth creation, while highly leveraged acquisitions produced negative investor reactions. Industry and regional analyses revealed that technology and healthcare sectors, as well as North American markets, generated superior CARs compared to other contexts. Qualitative case evidence underscored the importance of cultural integration and managerial effectiveness in sustaining long-term performance. Overall, the findings suggest that while M&As can create substantial shareholder value, such benefits are conditional upon strategic fit, financing decisions, industry context, and the effectiveness of post-merger integration.