This study examines the intra-industry effect of acquisition announcements from 1980-1999 and finds that the effect on rival ADRs is different than previously found for U.S. firms. The cumulative abnormal return (CAR) for the two-clay announcement win...
This study examines the intra-industry effect of acquisition announcements from 1980-1999 and finds that the effect on rival ADRs is different than previously found for U.S. firms. The cumulative abnormal return (CAR) for the two-clay announcement window (-1.0) is a statistically significant -0.54% while U.S. firms generally have positive abnormal announcement returns. Cross-sectional regression analysis shows that subsequent acquisition announcements in the same industry have a positive stock-price impact for ADR rivals and that European firms have a greater positive response than non-European firms do.