A Study of Strategic Takeovers
5 Conclusion 97
97 5 Conclusion This doctoral thesis illustrates the wealth effects of M&A transactions within the construction industry. Despite the general findings of negative impacts of M&A on the bidder wealth in cross-industrial studies (Loughran and Vijh, 1997; Rau and Vermaelen, 1998; Andrade et al., 2001; Moeller et al., 2005), I find a dis- tinct picture for the construction industry due to the uniqueness of the products and its high fragmentation that causes low profit margins and a tense economic situation for the construction sector. Hence, my findings explain whether M&A serve as a remedy for construction firms to improve their economic situation or whether a M&A strategy is superior within the construction industry. To accomplish these objectives, I discuss in three studies the crucial aspects of M&A within the construction industry and its impact on corporate wealth. The first study focuses on short-term wealth effects in respect to a M&A an- nouncement. As assumed the positive wealth effects for the bidding companies show a distinct picture different of those from cross-industrial studies. Within the construction industry acquirers achieve abnormal returns from M&A. In line with Denis et al. (2002), Goergen and Renneboog (2004) as well as Mentz and Schiereck (2008) horizontal or vertical acquisitions with a domestic focus is the superior strategy for acquiring construction firms. Non-construction firms gain most from conglomerate takeovers of construction firms whereas the geographi- cal focus is of secondary relevance. The investigation of the bidders’ wealth ef- fects...
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