Long-term value creation in mergers and acquisitions: Contribution to the debate

Abstract

In recent years multiple empirical works have been undertaken to analyze the effect of mergers and acquisitions (M&A) on corporate performance, in order to effectively confirm whether M&A are investment projects that are able to create value for the shareholders. Nowadays, the analysis of the M&A value creation is still subjected to a profound debate, especially when studying the implication of time (short-term versus long-term value creation measurement) and the methodology to evaluate the value creation in the long run. In this chapter we propose a comprehensiv e review and in-depth analysis about these open debates, we evaluate the validity of the different methodologies based in calculating the stock abnormal returns provoked by the operation, and we include, as additional contribution, a short study of the implications of this theoretical discussion in a concrete example of sectoral M&A in the digital era, to illustrate the debate.