Impact of M&A announcement on stock price in VietNam food and beverage manufacturing industry during 2010-2015
Abstract
Mergers & Acquisitions (M&A) activity has been developing strongly in the Vietnamese Food & Beverage manufacturing industry recently. This study aims to investigate the impact of M&A announcements on stock prices; or in other words, to examine whether the investors can earn abnormal returns in case of M&A event. A sample of 24 announcements released by 10 listed F&B firms on both Ho Chi Minh Stock Exchange and Hanoi Stock Exchange during 2010 and 2015 is used in the sample to test the stock prices’ reaction. By using the standardized abnormal return test over the [-10,+10] event window, the findings show that the market does not react on the announcement date. Moreover, there exists the evidence of information leakage since statistically significant abnormal return were found on day -1. Finally, the cumulative TSARs are both significantly and insignificantly negative during the event window, which means the announcements cannot improve the performance of selected acquiring firms after the M&A transactions.
Keywords: Mergers and Acquisitions, M&A, Food & Beverage Manufacturing Industry, F&B Industry, Event Study, Stock Returns, Stock Prices, Abnormal Returns, Cumulative Abnormal Returns, Bidding firms, Vietnam.