Performance of Corporate Acquisitions over the Medium Term in Germany

1. Introduction and Motivation.- 2. The German Stock Market, the German M&A Environment and its Corporate Legal and Regulatory Structure.- 3. Issues of Corporate Governance.- 4. Literature Review.- 5. Sample Design and Description.- 6. Data Analysis.- 7. Methodology and Hypothesis.- 8. Statistical Analysis and Empirical Results.- 9. Discussion of Results and Conclusions.- Appendices.- Appendix 1: List of Publicly Listed German Companies which have acceded to the German Takeover Code.- Appendix 2: List of Target Companies with the Respective Majority Owner.- Appendix 3: Summary of the Data Set by Transaction.- Appendix 4: Selected Time-Series Plots.- Appendix 5: Selected Normal Plots.- Appendix 6: Tables for Chapter 6: Data Analysis.- Appendix 7: Macros for the Moment Checking Statistics g1 (Skewness) and g2 (Kurtosis).- Appendix 8: Selected Autocorrelation Functions and Partial Autocorrelation Functions.- Appendix 9: Results of the Runs Test.- Appendix 10: Macro for the Levene Test.- Appendix 11: Macro for the Walsh Procedure of Outliers’ Detection.- Appendix 12: Graphs of Abnormal Returns for the Mean Adjusted Return Model.- Appendix 13: Graphs of Abnormal Returns for the Industry Adjusted Market Model.- Appendix 14: List of Listed Options on the Deutsche Terminbörse AG.- References.

Dr. K. Randolf Scheller studierte an der Wharton School (BS Economics) in Philadelphia und an der University of Chicago (MBA). Er promovierte am Lehrstuhl für Internationale Unternehmensfinanzierung von Prof. Dr. Gunter Dufey an der Wissenschaftlichen Hochschule für Unternehmensführung (WHU) in Koblenz. Er ist heute als Investment-Banker bei der Oertel-Scheller GmbH München/Hamburg tätig und unter www.oertel-scheller.de zu erreichen.

Does the performance of target industrial firms whose shares have been taken over in their majority by another industrial firm come up to expectations? K. Randolf Scheller evaluates the excess stock returns not only during an announcement period, but over a longer term period of up to five years. The author rejects the shareholder-value-maximizing hypothesis over longer term periods in this kind of transactions because the results of his study show significant negative abnormal returns. With a narrow majority the acquiring firm is not able to exercise sufficient control over the management of the target firm and its business policies in order to improve the performance of its investment.