The effect of merger and acquisition announcement on the stock price in Malaysia / Mimi Haizura Sharif

Merger announcements might lead to expectations about a positive perception in the stock price of the potential of these mergers for both the acquirer firm and the target firm. In this study, we investigate the impact of announcement of merger and acquisition to the stock price in Malaysia. The objective of this study is examine whether announcements of merger and acquisitions affect the stock price of the company, This study using daily stock price and FBM KLCI to calculate the abnormal return. The data arc collected tar 4 years frorn 2013 to 2016. Between that years, there is 840 announcement of merger and acquisitions in Malaysia. For this study we select the company that are listed in Bursa Malaysia and 100% acquire the target company. Because of limitation of data, the company used in this study is 111 company. This study only focus on investigating acquirer firm abnormal return. This huge reduction in number of companies due to only a few of them are listed in Bursa Malaysia and also limitation to get the stock price of the company. In this study, we found that there is significant abnormal return before and after merger and acquisition. Other than that, we also found that announcement of merger and acquisitions had giving impact towards stock price of company.