POST-MERGER & ACQUISITIONS (M&A) RETURNS: ARE BUYERS WINNERS? EVIDENCE FROM PORTUGAL

Companies operate in a highly competitive market at a globalized time. One of the strategies used by firms, which characterize this global integration of the markets, is called the Mergers & Acquisitions (M&A). These transactions are one of the biggest events that can occur in a companies' life which consequently produce impacts not only for the companies involved but also for the market structure. In fact, this phenomenon involves a set of controversies among academics who continue to debate, for example, whether these operations result in an increase of productivity or if they create rather than destroy value for the shareholders of the companies. Furthermore, despite a consensus on the popularity of Mergers and Acquisitions operations (e. g. Lubatkin, 1983 and Gaughan, 2007), there are many reasons for performing these operations, the most targeted to achieve a good investment, that is, a profitable businesses (Pautler, 2001). In fact, M&A is a strategy used by organizations in order to achieve their objectives of growth and diversification This paper aims to examine takeovers that have occurred in the last decade in Portugal using the event studies methodology. The results obtained suggest that the shareholders of the buying companies' usufruct narrow returns only, tending to close to zero. In global terms, the results suggest a positive impact for the involved shareholders in this type of transactions. Finally, it is important to note the potential presence of insider trading in these transactions.