Case Study on Dmi Field Service Division
The Effect of Mergers and Acquisitions on Shareholder Returns
Agus Sugiarto
Victoria Graduate School of Business Faculty of Business and Law
Victoria University of Technology Melbourne
2000
The Effect of Mergers and Acquisitions on Shareholder Returns
by
Agus Sugiarto
Bachelor of Law (Honours) University of Brawijaya Indonesia Master of Business Administration Royal Melbourne Institute of Technology Australia
A dissertation submitted to Victoria University of Technology in fulfilment of the requirements for the degree of Doctor of Business Administration
Victoria Graduate School of Business Faculty of Business and Law
Victoria University of Technology Melbourne
2000
^0001006987160 sugiarto, Agu The effect ^„ m ^ . ot acquisitions on returns
s and ^^older
Table of Contents Page Table of Contents Abstract Declaration Acknowledgment List of Tables List of Illustrations ii vi vii viii x xiv
Chapter 1 Introduction 1.1. Background 1.2. The Hubris theory of mergers and acquisitions 1.3. Rationale of the present study 1.4. Definition of mergers and acquisitions 1.5. The objectives of the research 1.5.1. General objective 1.5.2. Specific objectives 1.6. Limitation of the research 1.7. Research method 1.8. Data 1.9. Organisation of the study Part One Literature Review Chapter 2 The Rationale for Mergers and Acquisitions 2.1. Introduction 2.2.The hypotheses of mergers and acquisitions 2.2.1. Value maximising hypothesis 2.2.2. Non-value maximising hypothesis 2.2.3. Managerial hypothesis 2.2.4. Inefficient management hypothesis 2.3. Summary Chapter 3 : Measurement and Empirical Evidence 15 16 17 18 19 20 20 9 10 10 11 12 13 14 I 2 3 5 5 5 6 6 7 7 7
Abnormal Return
3.1. Introduction 3.2.Event studies 3.2.1. The advantages of event studies 3.2.2. The drawbacks of event studies 3.3. Accounting numbers methodology 3.3.1. The advantages of accounting numbers 3.3.2. The drawbacks of accounting numbers ii
3.4. Empirical evidence
Agus Sugiarto
Victoria Graduate School of Business Faculty of Business and Law
Victoria University of Technology Melbourne
2000
The Effect of Mergers and Acquisitions on Shareholder Returns
by
Agus Sugiarto
Bachelor of Law (Honours) University of Brawijaya Indonesia Master of Business Administration Royal Melbourne Institute of Technology Australia
A dissertation submitted to Victoria University of Technology in fulfilment of the requirements for the degree of Doctor of Business Administration
Victoria Graduate School of Business Faculty of Business and Law
Victoria University of Technology Melbourne
2000
^0001006987160 sugiarto, Agu The effect ^„ m ^ . ot acquisitions on returns
s and ^^older
Table of Contents Page Table of Contents Abstract Declaration Acknowledgment List of Tables List of Illustrations ii vi vii viii x xiv
Chapter 1 Introduction 1.1. Background 1.2. The Hubris theory of mergers and acquisitions 1.3. Rationale of the present study 1.4. Definition of mergers and acquisitions 1.5. The objectives of the research 1.5.1. General objective 1.5.2. Specific objectives 1.6. Limitation of the research 1.7. Research method 1.8. Data 1.9. Organisation of the study Part One Literature Review Chapter 2 The Rationale for Mergers and Acquisitions 2.1. Introduction 2.2.The hypotheses of mergers and acquisitions 2.2.1. Value maximising hypothesis 2.2.2. Non-value maximising hypothesis 2.2.3. Managerial hypothesis 2.2.4. Inefficient management hypothesis 2.3. Summary Chapter 3 : Measurement and Empirical Evidence 15 16 17 18 19 20 20 9 10 10 11 12 13 14 I 2 3 5 5 5 6 6 7 7 7
Abnormal Return
3.1. Introduction 3.2.Event studies 3.2.1. The advantages of event studies 3.2.2. The drawbacks of event studies 3.3. Accounting numbers methodology 3.3.1. The advantages of accounting numbers 3.3.2. The drawbacks of accounting numbers ii
3.4. Empirical evidence
References: Table 4.1. 4.2. 6.1. Total sample of mergers and acquisitions (1993-1997) Composition of the sample (1993-1997) The average abnormal retum of bidding 10 days prior to and 10 days after the announcement (Market model) firms Page 44 44 61