IDEAS home Printed from https://ideas.repec.org/a/taf/oabmxx/v11y2024i1p2374878.html
   My bibliography  Save this article

Long-term effect of the form of payment in Spanish mergers and acquisitions: an event study

Author

Listed:
  • Jesús Reglero
  • Teresa Corzo Santamaría
  • Rocío Saénz-Diez

Abstract

This paper explores the methods of payments for companies engaged in mergers or acquisitions, focusing on the Spanish market from 2007 to 2019, specifically on transformative transactions. We use a novel approach to build a sample of homogeneous corporate transactions that allows us to measure the performance for the acquirer one year after the announcement. A descriptive analysis, considering seventeen criteria, and an event study performed using the market model, CAPM and the Fama-French and Carhart four factor model, evaluate the acquirer’s performance post-announcement. Statistically significative results indicate that using shares over cash is preferable for acquirers to achieve sustained success. These findings reveal that, despite theoretical advantages of cash, shares as method of payment may lead to better stock market performance, limited financial profile deterioration, and more favorable long-term prospects for shareholders.

Suggested Citation

  • Jesús Reglero & Teresa Corzo Santamaría & Rocío Saénz-Diez, 2024. "Long-term effect of the form of payment in Spanish mergers and acquisitions: an event study," Cogent Business & Management, Taylor & Francis Journals, vol. 11(1), pages 2374878-237, December.
    • Handle: RePEc:taf:oabmxx:v:11:y:2024:i:1:p:2374878
    DOI: 10.1080/23311975.2024.2374878
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23311975.2024.2374878
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/23311975.2024.2374878?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oabmxx:v:11:y:2024:i:1:p:2374878. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://cogentoa.tandfonline.com/OABM20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.