Mergers and Acquisitions in Shipping

George Alexandrou, Dimitrios Gounopoulos, Hardy Thomas

OAI: oai:purehost.bath.ac.uk:openaire_cris_publications/0f8bf90e-4000-41ac-bd51-94736dd3847b • DOI: https://doi.org/10.1016/j.tre.2013.11.007

In this comprehensive study of all shipping mergers and acquisitions since 1984 we document that the shareholders of both acquirers and targets realise average abnormal gains of 1.2% and 3.3% respectively and both parties gain more from diversifying than focus-increasing deals. Acquirers gain more when paying with stock, in cross-border deals and from taking over public targets, while larger acquirers destroy wealth. Targets gain more from cross-border and focus-increasing deals. Regulatory interventions, like the EU repeal of exemption from competition and the US Ocean Shipping Reform Act, affect the marginal merger propensity and this propensity differs significantly across regions.