Mergers and Acquisitions and Success Factors in Thailand

  • Jiraporn Popairoj Doctor of Philosophy in Business Administration, Martin De Tours School of Management and Economics, Assumption University, Thailand
Keywords: mergers, acquisitions, contagion, efficiency, inside ownership

Abstract

The paper studies the impact on target’s financial performance, proxied by cumulative abnormal return (CAR), of completed M&A deals occurred in Thailand during January 2000 - December 2014.   Two main research questions are raised in the study.  Firstly, the study tests whether there is a statistical difference of CAR before and after announcement of M&A completed deals.  Secondly, the study examines six main factors that explain financial performance improvement (proxied by CAR), one-year; two-year; and three-year after announcement, of M&A completed deals.  The factors include cultural difference, corporate governance, methods of M&A payment, contagion effect, institutional ownership and inside ownership.  The results show that there is a statistical difference between standardized CAR during 120 days before and after announcement date.  Further, contagion effect on efficiency (proxied by ROE and ROA), inside ownership in targets and target’s size are significant factors for higher CAR after M&A.  The rest of the factors are statistically insignificant.   All listed companies in Thailand are required to have good governance and most M&A deals in Thailand use cash as method of payment while cross-border M&A in Thailand is rare and still at an initial stage, thus, future research can be conducted when more M&A data is sufficient.

Published
2019-12-09