Assessing the impact of industry in M&A success

Abstract

The purpose of this thesis is to assess whether a company’s industry has a significant impact on the success rate of an M&A deal. The theoretical analysis is divided in three main determinants which are believed to support differences in performance – Premiums, Revenues & Costs and Integration. The empirical study regressed the Premiums and CARs for three distinct industries. The main results suggest both the acquirer’s industry and the premiums paid are, as hypothesised, relevant when explaining M&A success. Furthermore, evidence shows knowledge-intensive firms – Pharmaceutical and Software - tend to pay higher premiums but achieve better CARs.