Abstract

AMESTICA RIVAS, Luis Rodolfo; CAMPOS FUENTES, Danilo Alexis  and  CORNEJO SAAVEDRA, Edinson Edgardo. Mergers and acquisitions announcements and effects on stock returns: Chile, 2010-2014. Cuad. Adm. [online]. 2017, vol.30, n.54, pp.39-64. ISSN 0120-3592.  https://doi.org/10.11144/javeriana.cao30-54.afae.

This study analyzes 61 mergers and acquisitions (M&A) announcements -between 2010 and 2014 by 30 Chilean firms- and their effects on share prices; and looks for abnormal returns in the previous days, which could be related to the use of privileged information and insider trading problem. Through an event study, the average abnormal returns (AR) occurred before and after the announcement of M&A are estimated. In acquisitions, on the previous day the AR is positive (0.60%-0.8q%) and significant; and the cumulative average abnormal return between the previous six days is also positive and significant (2.30%-2.48%). This would reveal a leak of private information and insider trading problem. In mergers, the results are not conclusive.

Keywords : Merger; acquisition; insider; event studies.

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