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The Impact Of Diversifying Acquisitions On Shareholder Wealth: Evidence From Turkish Acquirers

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  • Elif Akben Selcuk
  • Halil Kiymaz

Abstract

This study examines the impact of diversifying acquisitions on acquiring Turkish firms. Using a sample of 98 acquisitions during 2000-2011, the study finds that acquiring firms experience statistically significant wealth gains surrounding the announcement date. The cross-sectional regression results show that diversifying acquisitions create higher wealth gains to acquirers compared with focused acquisitions. The results also show that smaller firms experience higher abnormal returns compared to larger firms and that acquiring public firms result in higher wealth gains to acquirers. Finally, the findings indicate that results differ among group affiliates and independent firms. If an acquisition is made by an independent firm, diversifying acquisitions generate higher abnormal returns compared to focused acquisitions. However, if the acquirer is a group affiliate, there is no significant difference between the two types of acquisition activities in terms of wealth effects

Suggested Citation

  • Elif Akben Selcuk & Halil Kiymaz, 2015. "The Impact Of Diversifying Acquisitions On Shareholder Wealth: Evidence From Turkish Acquirers," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 9(3), pages 19-32.
    • Handle: RePEc:ibf:ijbfre:v:9:y:2015:i:3:p:19-32
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    More about this item

    Keywords

    Shareholder Value; Wealth Effect; Stock Prices; Turkish Market;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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