This study examines macroeconomic and industry-level factors (with particular emphasis on the business cycle) on industry-level merger activity. In a sample of US mergers from 1979 to 2006, we find that industry level mergers are highly pro-cyclical. The business cycle has a positive and significant impact on both horizontal and non-horizontal mergers, even after controlling for other macroeconomic and industry-level effects. Although macroeconomic variables have similar effects on both horizontal and non-horizontal mergers, industry-level factors vary significantly between the two types of mergers. Horizontal mergers are much more aligned with neo-classical theories, while non-horizontal mergers are more affected by financing constraints and overvaluation. We also find that the determinants and financing preferences of industry-level mergers vary greatly across the business cycle stages, which suggests that the motivation for mergers changes in different economic conditions.

This study examines macroeconomic and industry-level factors (with particular emphasis on the business cycle) on industry-level merger activity. In a sample of US mergers from 1979 to 2006, we find that industry level mergers are highly pro-cyclical. The business cycle has a positive and significant impact on both horizontal and non-horizontal mergers, even after controlling for other macroeconomic and industry-level effects. Although macroeconomic variables have similar effects on both horizontal and non-horizontal mergers, industry-level factors vary significantly between the two types of mergers. Horizontal mergers are much more aligned with neo-classical theories, while non-horizontal mergers are more affected by financing constraints and overvaluation. We also find that the determinants and financing preferences of industry-level mergers vary greatly across the business cycle stages, which suggests that the motivation for mergers changes in different economic conditions.

This study investigates how chief executive officer narcissism impacts the organizations strategic decisions and outcomes. Rooted in the idea that the organization is a reflection of its top managers, I theorize that narcissistic chief executive officers may influence the decision process leading to corporate acquisitions. Furthermore, taking into account the Dotcom bubble and subprime-crash, research on merger waves is incorporated into the research framework as an outside of the organization effect impacting organizational outcomes. Using a sample of 116 acquisitions by 60 chief executive officers at public listed U.S. firms this is tested from 1994-2017. The results show little to no connection between chief executive officer narcissism and corporate acquisitions in total, international acquisitions or through truly large acquisitions. Though there is a positive connection between observable characteristics such as education and age influencing the decision to acquire firms. When comparing the sample of 116 acquisitions to a general market sample of 4379 acquisitions, a connection to merger wave theory is identified. / Denna studie undersöker hur verkställande direktör narcissism påverkar organisationens strategiska beslut och utfall. Med förankring i idén att organisationen är en reflektion av sina ledare, teoretiserar jag för hur narcissistiska verkställande direktörer kan influera beslutsprocessen som leder till företagsförvärv. Vidare, genom att ta i beaktning IT bubblan och finanskrisen, inkorporeras forskning om merger waves i det teoretiska ramverket som en extern faktor vilket påverkar organisatoriska utfall. Med ett urval av 116 uppköp av 60 verkställande direktörer på publika företag i USA testas detta under perioden 1994-2017. Resultatet visar lite till ingen koppling mellan narcissistiska verkställande direktörer och företagsförvärv vare sig totalt, internationella förvärv eller genom mycket stora förvärv. Däremot visar denna studie en koppling mellan observerbara egenskaper såsom utbildning och ålder påverkar beslutet att förvärva företag. När urvalet 116 förvärv jämförs med ett generellt marknadsurval på 4379 förvärv, påvisas det en koppling till merger wave teori.

This thesis builds upon literature that for many decades have examined the possible wealth creation of M&A’s. We investigate the acquiring firms share value response to M&A’s performed by public acquirers active on the Swedish market in 1998-2016. Our research builds upon previously conducted studies depicting both positive- and negative returns. Furthermore, our study considers how M&A’s are affected by merger waves and their creation of hot and cold markets. Our sample consists of 517 acquisitions including both smaller and larger transactions. Through an event-study, we investigate how the share value reacts during an 11 day event window surrounding the announcement of an M&A. Our findings show predominantly positive abnormal returns disputing much of the previous M&A research. Additionally, because abnormal returns are present throughout the event window, our results indicate that the Swedish market does not operate at a strong level of efficiency. Our main contribution is providing a coherent view of M&A’s conducted in Sweden during nearly two decades. As well as, providing evidence that M&A’s create value for the acquirer.

Historically, merger and acquisition (or M&A) activity has occurred in cyclical patterns, forming what are known as “merger waves.” To date, there have been a total of seven waves. Though it is widely acknowledged that merger waves exist, there is no consensus on what drives these waves. Through both qualitative and quantitative analysis, this paper aims to determine the causes of merger waves and looks at those causes through two different lenses: the neoclassical view, which states that economic shocks cause merger waves, and the behavioral view, which states that increases in merger activity are due to managerial behavior and decisions. By analyzing the economic, political, and technological landscapes as well as valuation and interest rate data during periods of intense merger activity, I conclude that neoclassical theories are stronger in explaining the first three waves, whereas behavioral theories are stronger in explaining the last three waves.

One of the most conspicuous features of mergers is that they come in waves that are correlated with increases in share prices and price/earnings ratios. We use a natural way to discriminate between pure stock market influences on firm decisions and other influences by examining merger patterns for both listed and unlisted firms. If "real" changes in the economy drive merger waves, as some neoclassical theories of mergers predict, both listed and unlisted firms should experience waves. We find significant differences between listed and unlisted firms as predicted by behavioral theories of merger waves. (author's abstract)

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This thesis provides more precise characterisation of patterns, causes and consequences of takeover activity in Australia over three decades spanning from 1972 to 2004. The first contribution of the thesis is to characterise the time series behaviour of takeover activity. It is found that linear models do not adequately capture the structure of merger activity; a non-linear two-state Markov switching model works better. A key contribution of the thesis is, therefore, to propose an approach of combining a State-Space model with the Markov switching regime model in describing takeover activity. Experimental results based on our approach show an improvement over other existing approaches. We find four waves, one in the 1980s, two in the 1990s, and one in the 2000s, with an expected duration of each wave state of approximately two years. The second contribution is an investigation of the extent to which financial and macro-economic factors predict takeover activity after controlling for the probability of takeover waves. A main finding is that while stock market boom periods are empirically associated with takeover waves, the underlying driver is interest rate level. A low interest rate environment is associated with higher aggregate takeover activity. This relationship is consistent with Shleifer and Vishny (1992)'s liquidity argument that takeover waves are symptoms of lower cost of capital. Replicating the analysis to the biggest takeover market in the world, the US, reveals a remarkable consistency of results. In short, the Australian findings are not idiosyncratic. Finally, the implications for target and bidder firm shareholders are explored via investigation of takeover bid premiums and long-term abnormal returns separately between the wave and non-wave periods. This represents the third contribution to the literature of takeover waves. Findings reveal that target shareholders earn abnormally positive returns in takeover bids and bid premiums are slightly lower in the wave periods. Analysis of the returns to bidding firm shareholders suggests that the lower premiums earned by target shareholders in the wave periods may simply reflect lower total economic gains, at the margin, to takeovers made in the wave periods. It is found that bidding firms earn normal post-takeover returns (relative to a portfolio of firms matched in size and survival) if their bids are made in the non-wave periods. However, bidders who announce their takeover bids during the wave periods exhibit significant under-performance. For mergers that took place within waves, there is no difference in bid premiums and nor is there a difference in the long-run returns of bidders involved in the first half and second half of the waves. We find that none of theories of merger waves (managerial, mis-valuation and neoclassical) can fully account for the Australian takeover waves and their effects. Instead, our results suggest that a combination of these theories may provide better explanation. Given that normal returns are observed for acquiring firms, taken as a whole, we are more likely to uphold the neoclassical argument for merger activity. However, the evidence is not entirely consistent with neo-classical rational models, the under-performance effect during the wave states is consistent with the herding behaviour by firms.