Oana Resceanu
Ph.D. Candidate, The Romanian Academy of Economic Studies,
Romania.The Impact of Synergies on Mergers & Acquisitions
- Empirical Analysis on the Pharmaceutical Sector
on the European Stock Exchanges during 2004-2010
Valuing and identifying synergies in mergers and acquisitions is
one of the important issues in Corporate Finance. The aim of this paper
is to analyse the impact of synergies resulting from mergers and
acquisitions in the European pharmaceutical sector, between 2004 and
- The study has analysed the impact of the announcement of the
closing of the deal on the stock price evolution of the acquiring
companies. It has been used the event study technique. The abnormal
return was daily measured during the window event, which is
composed of 20 days before the event, the date of the event, and 60
days after the event. The estimation period for the parameters of the
regression model used to compute the normal return, included 250 days
before the event window.
The results show clearly the positive market expectations, reflected
in the stock appreciation, in the day of the announcement as well as in
the following few days. However, the expected positive impact begins
to fade out resulting in negative expectations afterwards.