Do acquiring firms achieve their mergers and acquisitions objectives? Evidence from Japan

This study assessed whether acquiring firms achieve the objectives of mergers and acquisitions (M&A) that are presented in their press releases and financial statements. It examined the usefulness of disclosing the M&A objectives to investors by analysing a sample of 232 M&A conducted be...

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Bibliographic Details
Published in:Accounting and finance (Parkville) 2022-06, Vol.62 (2), p.2905-2945
Main Author: Amano, Yoshiaki
Format: Article
Language:English
Subjects:
Acquisitions & mergers
Disclosure
Financial statements
Japan
M&A objectives
M&A performance
Mergers and acquisitions
Narrative disclosure
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Summary:This study assessed whether acquiring firms achieve the objectives of mergers and acquisitions (M&A) that are presented in their press releases and financial statements. It examined the usefulness of disclosing the M&A objectives to investors by analysing a sample of 232 M&A conducted between Japanese firms. The findings show that disclosed M&A objectives regarding profitability, efficiency, and growth are not usually realised. The results also show that describing M&A objectives in financial statements leads to higher short‐term stock returns while the stock market adjusts the valuation of firms based on their actual performance in the long run.
ISSN:0810-5391
1467-629X
DOI:10.1111/acfi.12909