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The effect of M&As on the financial valuation of the acquiring firm for the Telecom industry

Roelink, D. (2020) The effect of M&As on the financial valuation of the acquiring firm for the Telecom industry.

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Abstract:Mergers and acquisitions result in many varying consequences for both the buying and target firm. This thesis takes a focus specifically on the financial consequences for the buying firm. It aims to determine what effect mergers or acquisitions have on the intrinsic evaluation done by company executives and the perceived evaluation of shareholders for the acquiring firm. An empirical cycle is used to systematically create a process of evaluation that is effective for mergers and acquisitions as well as the ten case Telecom sample on hand, to apply this process of evaluation on the sample and finally analysing the results. This research concludes that for this sample of ten firms within the Telecom industry, there is a strong positive relationship between going through a merger or acquisition and an increase in financial value for the buying firm. More specifically, in all ten cases the Enterprise Value, which is the type of valuation used in this thesis, increases from before to after the merger or acquisition. This type of analysis can be used as a guideline for complementary research in other industries to eventually create predictive models regarding the financial consequences of a merger or acquisition on the firms involved.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/82253
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