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Introduction

The impact of mergers


The topic of corporate growth, through mergers
and acquisitions on and acquisitions is of great interest among
shareholder wealth in researchers, managers and journalists (Kreitl
et al., 2002). There are various motives for
the UK construction corporate growth and development. In
industry construction, growth is important because the
size of a project is large and often contractors
Frank T. Delaney and need to finance the project as well as undertake
it on the building site (Hillebrandt and Cannon,
Sam C. Wamuziri 1990). Also, size gives confidence to the client in
the capability of the company. There are other
possible motives for growth such as profit, cost,
revenue and prestige. The means of achieving
corporate growth can occur through internal or
The authors
external growth. Langford and Male (2001)
Frank T. Delaney is a Research Student and identified three means of achieving corporate
Sam C. Wamuziri is a Lecturer, both at the School of the growth and development.
Built Environment, Napier University, Edinburgh, UK. (1) Internally, where the firm invests its own
capital to set-up and operate a new venture.
Keywords
This option is often the primary vehicle of
Acquisitions and mergers, Construction industry, growth.
Shareholder value analysis, United Kingdom
(2) Externally through acquisition or merger.
This option is often used where speed is
Abstract
of the essence.
One of the primary motives behind any strategic corporate
(3) A combination strategy which combines
decision is to maximise shareholder value. Strategic decisions
elements of internal and external
for UK construction firms are made with the objective of
maximising the wealth of the company’s shareholders.
development through contractual
This paper investigates the financial performance of UK agreements.
construction companies, which have been involved in A joint venture is an example of a combination
construction related mergers and acquisitions and examines
strategy, where in the construction industry, the
the impact of merger announcements on acquiring firms’ and
establishment of a new firm is jointly owned by
target firms’ stock performance in the UK construction
industry. It also examines abnormal share returns throughout
two or more firms. Therefore, in the
a period surrounding the announcement of both successful construction process, the contractual
and unsuccessful acquisition and merger bids. The overall relationship is between the client and the joint
results indicate that related construction mergers create venture. Joint ventures sometimes mature into
wealth for shareholders of the target firms. formal mergers. Rapid corporate growth is
achievable through the acquisition or merger of
another company, as opposed to organic growth
Electronic access
which can be a slow process. A feature of the
The Emerald Research Register for this journal is
construction industry in the past 5 years has
available at
been the increase in corporate activity. This
www.emeraldinsight.com/researchregister
activity leads to consolidation within the
The current issue and full text archive of this journal is industry. The acceleration of the industry’s
available at consolidation continued in 2001. The total
www.emeraldinsight.com/0969-9988.htm turnover of the top 100 companies in the
contracting and housebuilding sector was
Engineering, Construction and Architectural Management 35 per cent greater than in 1996. The industry’s
Volume 11 · Number 1 · 2004 · pp. 65–73
q Emerald Group Publishing Limited · ISSN 0969-9988 output also rose 20 per cent over that period
DOI 10.1108/09699980410512674 (1996-2001); therefore it would seem that the
65
The impact of mergers and acquisitions on shareholder wealth Engineering, Construction and Architectural Management
Frank T. Delaney and Sam C. Wamuziri Volume 11 · Number 1 · 2004 · 65–73

big firms are taking an even bigger slice of the describe merging with a complementary
cake. Profits grew by 22 per cent in 2001 and contracting firm as a method of achieving rapid
have also increased by 88 per cent in cash terms expansion or diversification. Taking over a firm
in 2001. “Aggregates and building firms have with a fund of expertise in a particular area
been experiencing unprecedented consolidation whether that is a service/product area or a
as multinationals go in search of geographical geographical area avoids the problem of starting
presence and economies of scale” (Construction from scratch and the danger of costly mistakes.
News, 2000). The research in this paper is This is called start up synergy, for considerable
primarily motivated by the significant increase cost and time savings can be made by acquiring
in related mergers and acquisitions that has a going concern. Kreitl et al. (2002) found that,
occurred in the construction industry since the even though many risks are linked with mergers
mid 1990s. In their attempts to grow, or even to and acquisitions, this mode of corporate growth
stay afloat, many construction companies now contributed quite strongly to the engineering
find that their technological, financial and consultant firms corporate growth. The present
human resources are limited, and an increasing study examines the performance of UK
number will consider a merger or a business construction companies involved in related
collaboration to deal with these limitations. take-over bids in the period January 1996 to
There are various reasons often cited for December 2001. This paper investigates two
launching take-over bids. They include basic issues; bidders performance and the
obtaining synergy, to enter new markets or targets performance during the process of a
acquiring market power. Other reasons include related construction merger or acquisition.
exploiting scale economies as firm size may also These issues are based on the hypothesis that
bring financial economies by improving access related acquisitions afford greater opportunities
to capital markets and reducing the cost of for the consolidated organisation to realise
capital. Firms in the construction industry also operational synergy and performance.
need critical mass to compete for large projects. Haspeslagh and Jemison (1991) and Porter
Hopkins and Chaganti (1999) examine four (1987) argue that related acquisitions involve
related motives for the use of mergers: strategic, the consolidation of both human and physical
market, economic and personal. The main assets and because of opportunities to generate
motivation behind merger activity is to economies of scale and scope through resource
maximise shareholder value. Sudarsanam sharing and transfer and reduce the overall
(1995) states that all firm decisions including operating costs, superior performance may be
mergers and acquisitions are made with the achieved. Related construction acquisitions
objective of maximising the wealth of the involve companies which operate in the UK
company’s shareholders. construction industry.
Most of the available literature to date on It is well documented that target firms
mergers and acquisitions comes from the shareholders earn significantly abnormal
scrutiny of the financial sectors in the USA and returns around take-over announcements
UK. However, the last two decades have seen an (Ghosh and Lee, 2000). There is a considerable
increase in the volume of literature on mergers volume of literature of research on the wealth
and acquisitions in the UK construction effects of corporate take-overs (Draper and
industry. Betts and Ofori (1992), Hillebrandt Paudyal, 1999). However, the majority of these
and Cannon (1990) and Junnonen (1998) all studies are not industry specific and are not
examine the role of mergers and acquisitions in always involved in related acquisitions as the
the strategy formation in construction firms. companies analysed appear to be chosen
Male and Mitrovic (1999) identify acquisitions randomly from a range of industries. The aim of
and mergers as the common route for market this study is to assess, from the UK construction
penetration and growth in size in the perspective, the financial effects on bidding and
construction industry. Langford and Male target firms during a construction related take-
(2001) indicate that market diversification over process. This study examines the alleged
appears to be the dominant reason for take-over benefits of corporate take-overs by performing
activity in UK contracting. Fellows et al. (2002) an event study analysis of 46 acquiring firms and
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The impact of mergers and acquisitions on shareholder wealth Engineering, Construction and Architectural Management
Frank T. Delaney and Sam C. Wamuziri Volume 11 · Number 1 · 2004 · 65–73

33 target companies drawn from the UK target companies, but no significant excess
construction industry. This paper examines the returns either positive or negative to the
literature on merger performance and describes shareholders of the bidding firms. The results of
the data and methodology involved. The final the studies undertaken in the US are similar to
part reports an event study analysis and the that of the UK. Jensen and Ruback (1983)
results, including a summary and implications indicate significant positive gains for the target
of the findings. In this paper, the terms merger, shareholders and that bidding firm shareholders
acquisition and take-over are used inter- simply do not lose. Their study involved a
changeably. synthesis of earlier studies undertaken in the
US. They found that target firms displayed
significant abnormal stock price changes of
Research background 20 per cent in mergers and 30 per cent in tender
offers. Bidding firms realise gains of 4 per cent
Numerous studies estimate the effects of in tender offers and zero in mergers. Chang
mergers and acquisitions on the financial (1998) reports that in stock offers, bidders
performance and stock prices of the firms experience a positive abnormal return for those
involved in the process. Much of the literature to acquiring a privately held target. In cash offers,
date, has come from the US with a special focus bidders experience no abnormal returns.
on the banking and finance sectors (Becher, The companies chosen for the above studies
2000; Bliss and Rosen, 2001; Houston et al. were chosen randomly from a range of
2001). Cybo-Ottone and Murgia (2000) industries in the UK and the USA.
explore shareholder wealth in European
banking and find contrasting results to the US Sample selection
studies. Interest in the UK has expanded The data used in the analyses include stock
considerably over the past 20 years. There is a price performance, announcement dates,
considerable volume of research on the wealth acquisition sizes and market indices. The
effects of take-overs and mergers in the UK. sample of take-overs involved both target and
Dickerson et al. (1997), Draper and Paudyal bidding firms in the construction industry and
(1999), Kennedy and Limmack (1996), and listed on the London stock exchange during the
Sudarsanam et al. (1996), all explore the sample period. The sample period comprises
financial effects of take-over activity. firms that were involved in the acquisition
The majority of studies undertaken estimate process during 1996-2001. Companies that
the effect of stock price changes around the were included in the initial sample had to be
announcement period of a merger as a measure quoted for a minimum period of two years
of the economic effects of the take-over. The before the announcement of the take-over bid.
literature on the financial effects of mergers and The initial sample consisted of 111 bidding
acquisition has drawn on two principal sources firms and 97 target firms. Certain criteria were
of statistical evidence: stock market returns and then used to screen the data. The criteria used
accounting rates of return (Chatterjee and were the value of the acquisition, news
Meeks, 1996). The traditional studies on announcements during the take-over process,
domestic mergers and acquisitions in the UK availability of data and relation to the UK
indicate that large returns accrue to target construction industry. The analysis is based on
company shareholders with little or no positive firms where the acquisition value was greater
gains for the bidder company shareholders. than £10 million so that the target would be of
Amongst others, Draper and Paudyal (1999) sufficient size that any performance effects
infer that the shareholders of the target would be reflected in the data. Also, larger
companies benefit from the announcement of transactions are more likely to draw analyst and
take-over bids over the period surrounding the press attention and are therefore more likely to
announcement. In contrast, the shareholders of have detailed disclosures associated with them
the bidding firm suffer a loss. However, the loss (Houston et al., 2001). Another screening factor
suffered is just under 1 per cent. Kennedy and is major news announcements regarding the
Limmack (1996) report large excess returns for firms in the three days surrounding the
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The impact of mergers and acquisitions on shareholder wealth Engineering, Construction and Architectural Management
Frank T. Delaney and Sam C. Wamuziri Volume 11 · Number 1 · 2004 · 65–73

announcement date (Chang, 1998). Due to the the financial performance of the resulting entity
availability of data, the final sample consisted of in the succeeding years after acquisition.
46 bidding firms and 33 target firms. The firms However, a number of the acquisitions involved
in the sample were large contractors, house- in the study are related to construction
builders and materials suppliers. Of the 46 companies who are pursuing an acquisition
bidding firms analysed, 17 firms from the program, hence this creates problems in
materials and contracting sectors were involved accounting for resultant acquisitions. Brouthers
in the acquisition programs. The average value et al. (1998) suggest a new methodology for
of the deals involved in the sample was just evaluating the success or failure of mergers.
under £100 million. The required data were They believe that the performance should be
collected from the UK Business Park Review, measured against the goals and objectives set by
Construction News, The Financial Times and management, not against financial results.
Acquisitions Monthly. The share price data and However, these objectives may be distorted in
market indices were obtained from the some sectors, as very few managers will freely
Datastream database, the FT prices CD-ROM admit to managerial prestige or job security as
and HYDRA, which includes financial the main motive for merging or acquiring.
information similar to Extel cards. The Extel The second common method of performance
cards consist of two elements: annual cards measurement consists of evaluating the share
which are issued after publication of a prices. A company’s share price is a function of
company’s annual report and accounts and new two components namely fundamental business
cards which provide additional current performance and investor expectations (Stelter
information on companies for which there is an and Joiner, 2001). Therefore, share price would
annual card.
seem to provide a more reliable indication of the
financial performance of a company in the
periods surrounding the take-over activity. Also,
Methodology the use of market-based performance measures
allow the date information surrounding a
Measuring merger performance has been the
pending take-over to be precisely identified.
most onerous problem confronting researchers. To measure abnormal stock market returns,
Most of the literature on merger performance
a standard event study methodology is applied.
have used one of the two standard financial
The abnormal return for firm i at day t is
measures: accounting- or market-based.
defined as:
The first method of measurement considers the
determinants of company performance using ARit ¼ Rit 2 EðRit Þ ð1Þ
accounting data. Company performance is
usually defined in terms of a profitability where Rit is the stocks realised return for day t
measure, as measured by return of assets or and E(Rit) is its expected return in the absence
return on equity. However, it is believed that of an acquisition.
companies can use creative accounting The event study period used in this analysis
techniques which may imply that their is a 41 working day event window. Abnormal
published accounts may not be a true and fair returns are estimated over an observation period
reflection of the company’s financial position. of day 2 20 to day 20 around each initial
Accounting measures are subject to potential announcement day. Twenty days before and
bias and tend to reflect the short-term after the announcement date are taken as
performance of the firm over discrete time working days which accounts for approximately
intervals (Kennedy and Limmack, 1996). two months before and after the event day.
By contrast, market prices will reflect all Many event studies use a shorter window
available information on the basis of the efficient period. However, the take-over process in the
market hypothesis. Accounting measures UK suggests that bidders may start building up
cannot measure the performance benefits of their stake well before the announcement of bids
target firms following the announcement period and hence a wider event window is more
of the take-over. They can be used to measure appropriate (Draper and Paudyal, 1999).
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The impact of mergers and acquisitions on shareholder wealth Engineering, Construction and Architectural Management
Frank T. Delaney and Sam C. Wamuziri Volume 11 · Number 1 · 2004 · 65–73

Also, once a formal offer is made to the board of abnormal returns were also calculated using a
a target company, the offer must normally simple process of summing the abnormal
remain open for at least 14 days. Consequently, returns over different time series studies
the take-over event period may last for several (Becher, 2000).
days before and for more than two weeks after
the announcement date. However, there is Performance of mergers – results
concern for using a longer event window in
calculating bidder firm returns as there is less This section shows the results from the analysis
public rumination for a bidder getting ready to of the returns available to the shareholders of
make a bid. The use of a longer event window to target and bidding firms. In the event study, the
study the financial performance of the resulting standard market model and the mean adjusted
entity may also be questionable due to the return model, as defined by Brown and Warner
acquisition programs large construction firms (1985), were used to calculate the abnormal
embark on, and the continuing consolidation in returns. Brown and Warner (1985) also found
the UK construction industry. Excess returns that the non-normality of daily returns have no
are calculated using the following two obvious impact on event study methodologies.
procedures as adopted from Brown and Warner Although daily excess returns are also non-
(1985): normal, the evidence suggests that the mean
excess return in a cross-section of securities
i
Ai;t ¼ Rit 2 R ð2Þ converges to normality as the sample increases.
For sample sizes of approximately 50, the mean
where Rit is the observed daily arithmetic return
excess return is close to normal. The average
 i is defined as:
for firm i at day t. R
share prices for the companies sampled are also
X
221 listed in the tables as an indication of the activity
i ¼ 1
R Rit ð3Þ
220 2240 surrounding the take-over. Due to the similar
size of the target firms used in the sample the
where R i is the simple average of security i share price value is also similar. The
observed daily returns in the estimation period. announcement day (day 0) is the day of the first
The estimation period in the analysis starts at announcement of the acquisition. Results of
day 2 240 and ends at day 2 21 around its analysis of the reaction of the share price to the
announcement is shown in the following two
respective announcement day, which is defined
parts.
as day 0.
(1) Target firms. The average abnormal returns
The second procedure used is the market
(Ai,t) measured for the event study window
adjusted return:
are shown in Table I. Both raw and market
Ai;t ¼ Rit 2 Rmt ð4Þ adjusted returns are calculated. Also shown
in the table are the mean returns for the
where Rmt is the market return measured as the companies analysed. Consistent with the
first difference of the log of the market index literature reviewed in this paper, the results
(Draper and Paudyal, 1999). Due to the size provide evidence of excess returns to
difference in market index and stock returns, construction companies before and around
the log values are used. the period of announcement. Looking first
The market index was taken for each at the mean share price, there is a
firm’s respective construction sector from considerable rise in share prices around
Datastream’s sector index. This second the period of announcement. This is also
procedure allows for a comparison of the reflected in the models used to calculate the
observed returns of the acquiring or acquiree abnormal returns. Examining the mean
firms to that of UK construction firms in adjusted model, it displays no significant
general, during the period of announcement. increases or decreases in the twenty to five
This market index provides a yardstick in which days pre-announcement. However, the two
construction firms from different markets can days leading to the announcement indicate
measure their performance. Cumulative a noticeable increase in returns. The largest
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The impact of mergers and acquisitions on shareholder wealth Engineering, Construction and Architectural Management
Frank T. Delaney and Sam C. Wamuziri Volume 11 · Number 1 · 2004 · 65–73

Table I Returns from target firms during the event period Table II Returns from bidder firms during the event period
Days relative to Mean adjusted Market adjusted Days relative to Mean adjusted Market adjusted
the announcement Mean share abnormal abnormal the announcement Mean share abnormal abnormal
date price returns returns date price returns returns
2 20 114.7 0.18 0.01 2 20 301.10 21.47 22.24
2 15 115.5 0.57 0.46 2 15 298.90 0.59 0.09
2 10 113.9 0.30 0.06 2 10 300.92 2.30 1.63
25 117.9 1.52 0.94 25 301.87 1.42 0.26
24 118.8 0.75 0.24 24 301.20 20.68 20.32
23 119.3 0.40 0.56 23 301.10 20.12 20.55
22 120.5 1.05 1.44 22 300.97 20.11 0.25
21 129.6 7.00 6.77 21 299.60 21.37 20.29
0 141.7 8.61 9.30 0 300.57 0.97 1.45
1 142.0 0.16 0.80 1 300.94 0.37 0.68
2 142.1 20.03 0.24 2 300.60 20.34 0.85
3 142.0 0.35 20.09 3 300.90 0.29 0.68
4 142.5 20.08 0.26 4 301.00 0.12 20.14
5 142.4 20.18 0.34 5 302.40 1.37 0.65
10 142.0 20.15 0.18 10 305.10 0.50 20.33
15 142.8 20.07 0.34 15 302.25 20.81 20.53
20 142.4 20.11 20.31 20 309.27 0.48 0.27

one day excess return available to mean share price between 2 240 days until
shareholders of target companies occurs on day 2 21 before the press date. The shares
the day of announcement, with a value of of the bidding firm do not display any
8.6 per cent for the mean adjusted model significant excess returns around the
and 9.3 per cent for the market model. announcement period. The figure on the
The average abnormal returns from the day of announcement reveals a slight
mean model greatly reflect the average share increase in the returns of the shareholders of
price. The use of the market model allows bidding firms. In contrast to the experience
comparison of the target firms share price of target companies, the excess return is
with that of their competitors in the sector. very small, +0.97 per cent.
The table reveals similar findings for the Market adjusted returns also display similar
market model to that of the mean adjusted results to that of the mean adjusted results.
model. The abnormal returns to The market model would seem more appropriate
shareholder post-announcement date are for the estimation of returns to bidders firms
minimal in all three columns. than to target firms. The size of the acquiring
(2) Bidder firms. The average abnormal returns firm is usually greater than that of the acquiree.
for bidder firms measured for the event Therefore, the bidding firm would be more
study window are shown in Table II. Also prone to market fluctuations. The results show
shown in the table are the mean returns for no real signs of variation, especially within the
the companies analysed. The mean share announcement date. The figure on the day of
prices of bidding firms display no real announcement reveals a slight increase in the
variation over the event study period. returns of the shareholders of bidding firms. The
The stock data show no real positive or figure is slightly higher than the mean adjusted
negative changes in the firms prices. The model. The four days succeeding the event date
mean adjusted model displays negative show positive abnormal returns for the bidding
results four days before the announcement firms. However, these abnormal returns are
date. The section covered in the pre-press small compared to those of the target firms.
date for the mean model consisted of the The results provide evidence that bidding firms
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The impact of mergers and acquisitions on shareholder wealth Engineering, Construction and Architectural Management
Frank T. Delaney and Sam C. Wamuziri Volume 11 · Number 1 · 2004 · 65–73

do not appear to gain significant returns nor do study on bank mergers found a negative effect
they lose. on bidder firms returns. Berkovich and Narayan
(1993) report a significant loss in the share price
of bidding firms. Both models used in the
Discussion of results
analysis display similar abnormal returns.
The volume of literature examined to date, Earlier studies have shown that bidders
suggests that shareholders of the target tend to be larger companies than their targets
companies gained from the acquisition process (Haspeslagh and Jemison, 1991; Kennedy and
while the bidding firms show no signs of Limmack, 1996; Krishnan and Park, 2002).
improvement. The results of the studies on The use of a market index as a representative
construction companies in this paper seem to control for bidders may seem less appropriate
concur with the earlier studies. The abnormal than was the case for targets. As is the case in the
returns for target firms increase noticeably in UK construction industry there are a few very
two days before the announcement of a bid. All large companies in each sector. Any changes,
the targets studied for the event period report a positive or negative, on the stock price of these
significant increase in their trading volume and large companies could have a similar effect on
their share price prior to the announcement of a the market operated by the company. However,
take-over bid. These rises could be due to a comparison of the results for bidding firms
number of reasons and leakage of information is using the two models show that in general the
a possibility. Draper and Paudyal (1999) give results are very similar.
three possible explanations for the pre- In Table III, cumulative abnormal returns are
announcement increase in the price of target provided over four different event windows to
firms: market anticipation, stake building by a show what period produces the highest
potential bidder, or insider dealings. In the case abnormal returns. The cumulative abnormal
of insider dealing, there are various regulatory returns for the target firm confirm that targets
constraints and market surveillance which gain from take-over activity. From Table III,
suggest on average large increases in the volume the majority of this gain is achieved in five days
of trade. However, market anticipation and before and after the announcement date,
stake building are both legal and normal significantly increasing the day before the
practices. Market anticipation implies that the announcement and the day of announcement.
market is efficient in identifying and anticipating However, the cumulative abnormal mean and
potential acquisitions. Stake building may also market returns for the bidder firms show a gain
be expected to generate an increase in returns in returns over the 40-day period. The returns
for target firms as bidding firms seek to acquire for bidder firms around the period of
the maximum holdings permitted before a full announcement are not significantly effected.
scale bid must be launched. In the UK, It is the longer period surrounding the
investors buying or holding over 3 per cent of announcement that seem to give the greater
the company’s capital or over 15 per cent of the returns. A possible explanation for this
total voting rights are required to disclose their movement, could be the realisation of the
interest in the company. Stake building activities expected benefits which might only appear as
by a potential bidder cannot legally go the details of the merger are released over time.
undetected prior to a bid announcement
(Draper and Paudyal, 1999). As expected, the Table III Target and bidder firm cumulative abnormal returns by the time
biggest increase on returns for target period
shareholders occurs on the day of Acquiring firm Target firm
announcement of the bid. After the Mean Market Mean Market
announcement, the returns stabilise with no Days return return return return
significant changes, positive or negative, in the
20 days after. The results for the bidding firms 2 20 to +20 8.19 6.17 20.9 23.3
show a slight positive increase around the time 2 15 to +15 6.38 6.90 21.1 22.6
of announcement, this is contrary to the earlier 2 10 to +10 3.92 3.60 21.7 22.8
results in different sectors. Becher’s (2000) 2 5 to +5 1.92 2.50 19.7 20.1

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The impact of mergers and acquisitions on shareholder wealth Engineering, Construction and Architectural Management
Frank T. Delaney and Sam C. Wamuziri Volume 11 · Number 1 · 2004 · 65–73

Conclusions acquisition program and the incremental effect


of each acquisition. Of the 46 bidding firms,
Over the last five to six years, acquisitions and 17 of the construction firms were involved in
mergers of UK construction companies, an overall acquisition program.
particularly in the materials sector, rose to new Overall, the wealth effects from construction
heights (Construction News, 2000). Mergers and mergers are positive over the period studied.
acquisitions is understandably one of the topical However, controversial issues surrounding the
strategies of corporate management in market for corporate control have yet to be
construction as firms pursue growth. settled and many new issues have yet to be
The possibility that construction mergers, studied ( Jensen and Ruback, 1983). These
especially horizontal, will yield efficiency gains issues include the use of golden parachutes
is an issue that is subject to debate. Nonetheless, (compensation or contractual employment in
research in the performance measurement of the event of control changes), managerial
mergers and acquisitions in the UK actions to oppose take-overs, and the
construction industry is limited. There is a management of bidding firms over pricing the
limited body of knowledge about the take-over bid. Management in target firms may
functioning and performance of this important attempt to lengthen the time of the merger
strategic corporate process. This paper attempts process to possibly seek out new bidders, who
to contribute to the debate and analyse the
offer better opportunities for themselves and
financial performance of the bidder and target
their shareholders. Also, detailed knowledge of
companies in the UK construction industry.
the corporate control market should provide
The results indicate that in the construction
insights into divestitures and the role of joint
industry, related take-overs generate significant
ventures in the construction industry, why joint
positive gains for the target firm shareholders.
ventures are used in some cases and not in
However, the marketplace appears to generally
others.
question the gains from related mergers for the
bidding firm as reflected in the effect of a merger
announcement on acquirers stock price.
The market tends to be pessimistic about the References
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The impact of mergers and acquisitions on shareholder wealth Engineering, Construction and Architectural Management
Frank T. Delaney and Sam C. Wamuziri Volume 11 · Number 1 · 2004 · 65–73

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