Business, Management and Accounting
3 years ago

Friendly takeovers in Finland yield positive returns for bidding firms.

Journal of corporate governance insurance and risk management
Short Term Announcement Returns to the Bidder**
Kenneth Högholm, Johan Knif

Paper Summary

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The article investigates the short-term impact of takeover announcements on Finnish companies from 2000 to 2013. Most takeovers in Finland are friendly and aim for full control of the target company. The study found that, on average, takeover announcements result in a positive abnormal return for the bidding firm's shareholders, supporting the idea that takeovers create value. The abnormal return on the announcement day is around 1.4%, which is statistically significant. Small deals tend to yield higher abnormal returns, while cross-border deals result in smaller abnormal returns. Diversification deals, on the other hand, lead to higher abnormal returns for the bidding firm's shareholders.