The goal of this paper was to assess the performance of the M&A activities in the pharmaceutical and oil & gas sector in the US public market after the financial crisis of 2008. As historically long-term post-M&A return has been negative, we delved into ascertaining this result in these two sectors. For analysing the performance, we have taken a sample of public companies domiciled in the US who has executed M&A activities within 2010-2017 with a deal size greater than 10 million USD. The excess return has been calculated for these stocks using monthly calendar time portfolio and Fama-French Four Factor model (using both equal- weighted and value-weighted method for the constructed portfolio) and our results re- affirms in almost every case that there is no significant positive performance for M&A activities in both pharmaceutical and oil & gas sector. This study illustrates that historical underperformance of M&A activities persists in oil & gas and pharmaceutical sector; these sectors have been able to generate a positive return through M&A activities.
MSc in Finance Project-Simon Fraser University
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