Mergers & acquisitions : a study of abnormal returns and deal characteristics for acquiring companies during the winter season.

Seasonal Affective Disorder (SAD), a psychological condition that causes depression and heightened risk aversion among people experiencing fall and winter, have been found to have an impact on financial markets such as stock market returns from previous research. This paper aims to study if the effects of SAD are evident in mergers and acquisitions (M&A) deals. Data collected from public US M&A deals occurring between 1980 to 2008 with deal values more than US$10 million are subjected to empirical analysis and regression analysis. Results have subsequently shown to exhibit effects of SAD such as greater returns for deals conducted in the winter season, all of which are statistically significant. Other risk adverse attitudes can be observed in the way M&A deals during winter are concluded in cash, deal values being greater, and are more diversifying and hostile in nature.BUSINES