Do acquiring firms gain from takeovers? : empirical evidence from the Norwegian stock market

The objective of this thesis is to study the economic effect when acquiring firms announce takeovers in the Norwegian stock market. We find that bidders experience a positive abnormal announcement return of 2.16% on average. However, the abnormal return calculated in NOK is insignificantly negative. Large firms obtain insignificant abnormal returns of 0.22%, while small firms obtain significant returns of 4.10%. Thus, we find evidence of the size effect. The size effect is robust and holds when controlling for different measures of size, deal characteristics, and firm’s characteristics. Acquisitions do create value for acquiring firms’ shareholders only under certain conditions