Determinants of short-term value destruction for the acquiring firm

These paper analyses bidder short-term returns of 86 takeovers bids that occur between 1997 and 
2002 on the French market. Furthermore, the determinants of this performance are examined to 
improve understanding of the sources of value creation or destruction arising from M&A. The event 
study methodology is used to estimate bidder value creation. Two findings are shown in this study. 
First, we find strong evidence that the announcement of a takeover bid destructed of value for the 
bidder. Second, these results show that the relative size of the target and the announcement period 
transaction is associated with value destruction for the bidder.