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    The impact of acquisitions on stock prices of target companies: an empirical evidence from Turkey
    (İstanbul Bilgi Üniversitesi, 2020) Ekim, Hakan; Öztürk, Serda Selin
    ABSTRACT: This study examines the long term and short term effects that the announcements made in 2012-2019 concerning the stock acquisitions of 9 target firms publicly traded on Borsa İstanbul (previously, the İstanbul Stock Exchange) operating in the banking, manufacturing, food, and beverage sectors had on the target firms’ stock prices. Firstly, the theoretical framework of the study was formed by defining the fundamental terms of M&As and explaining the various types of M&A structures along with the advantages and disadvantages of each. Within the framework of theoretical reviews, the study also elaborates on the prime factors companies take into consideration when making M&A decisions, including synergy, economies of scale, financial and tax advantages, diversification, and globalization. Furthermore, the analysis section utilizes the event study method and employs the Capital Asset Pricing Model to test the effects the stock acquisition announcements have on the stock prices of the target companies. In addition to the sample review as a whole, a sectoral comparison is made in terms of the effects the share acquisitions of the target companies have on their stock prices, given the diversity in each company’s field of activity. Consequently, it was observed that in the long term, Finansbank’s stock experienced extra negative abnormal returns after the acquisition. Accordingly, in the long run, the riskiness of the stocks of Finansbank, Garanti, Doğtaş, Hürriyet, and Ulusoy after the acquisition decreased. On the other hand, it was observed that in the short term, the stocks of Tukaş, Finansbank, and Denizbank experienced extra abnormal negative returns after the acquisition, whereas the riskiness of the stocks in Banvit, Tukaş, and Finansbank decreased after the acquisition in the short term. As for a sectoral comparison, although there are limited similarities in the findings regarding the banking and food and beverage sectors, it may be concluded that there generally may be a decrease in the riskiness of stocks in the banking sector in the long term and in the food and beverage sector in the short term. In terms of the manufacturing sector, the findings revealed that the riskiness of the stocks of the target companies decreased in the long term.