Impact of mergers and acquisitions on stock prices: The U.S. ethanol-based biofuel industry

Aditya R. Khanal, Ashok Mishra, Kh A. Mottaleb

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Corporate restructuring activities in the form of mergers and acquisitions (M&As) are ongoing in the U.S. ethanol-based biofuel industry. With regard to M&As, a widespread concern is about financial performance of an individual firm and stable financial performance of the overall industry. Using an event analysis method, this study explores the impact of recent M&As on stock prices and value of the firm of publicly traded ethanol-based biofuel industry between 2010 and 2012 in the United States. Results regarding the average cumulative abnormal returns of acquiring firms suggest that the market positively responded toward recent M&As in the industry. Around 4% positive growth on a 60-day event window was attributed to M&As using market-adjusted market portfolio. A significant positive 0.47% gain in cumulative returns in a 4-day event window and a 2.7% positive gain in a 10-day event window were suggested by this study.

Original languageEnglish (US)
Pages (from-to)138-145
Number of pages8
JournalBiomass and Bioenergy
Volume61
DOIs
StatePublished - Feb 2014
Externally publishedYes

Fingerprint

bioenergy industry
Mergers and acquisitions
Biofuels
biofuel
merger
ethanol
Ethanol
markets
industry
market
Industry
price
firm
methodology

Keywords

  • Acquisitions
  • Bioenergy
  • Biofuel
  • Ethanol
  • Event analysis
  • G34
  • Mergers
  • Q20
  • Q42
  • Q43

ASJC Scopus subject areas

  • Agronomy and Crop Science
  • Forestry
  • Renewable Energy, Sustainability and the Environment
  • Waste Management and Disposal

Cite this

Impact of mergers and acquisitions on stock prices : The U.S. ethanol-based biofuel industry. / Khanal, Aditya R.; Mishra, Ashok; Mottaleb, Kh A.

In: Biomass and Bioenergy, Vol. 61, 02.2014, p. 138-145.

Research output: Contribution to journalArticle

@article{61f703f975be4c5e90b6f0d8c800412d,
title = "Impact of mergers and acquisitions on stock prices: The U.S. ethanol-based biofuel industry",
abstract = "Corporate restructuring activities in the form of mergers and acquisitions (M&As) are ongoing in the U.S. ethanol-based biofuel industry. With regard to M&As, a widespread concern is about financial performance of an individual firm and stable financial performance of the overall industry. Using an event analysis method, this study explores the impact of recent M&As on stock prices and value of the firm of publicly traded ethanol-based biofuel industry between 2010 and 2012 in the United States. Results regarding the average cumulative abnormal returns of acquiring firms suggest that the market positively responded toward recent M&As in the industry. Around 4{\%} positive growth on a 60-day event window was attributed to M&As using market-adjusted market portfolio. A significant positive 0.47{\%} gain in cumulative returns in a 4-day event window and a 2.7{\%} positive gain in a 10-day event window were suggested by this study.",
keywords = "Acquisitions, Bioenergy, Biofuel, Ethanol, Event analysis, G34, Mergers, Q20, Q42, Q43",
author = "Khanal, {Aditya R.} and Ashok Mishra and Mottaleb, {Kh A.}",
year = "2014",
month = "2",
doi = "10.1016/j.biombioe.2013.12.004",
language = "English (US)",
volume = "61",
pages = "138--145",
journal = "Biomass and Bioenergy",
issn = "0961-9534",
publisher = "Elsevier Limited",

}

TY - JOUR

T1 - Impact of mergers and acquisitions on stock prices

T2 - The U.S. ethanol-based biofuel industry

AU - Khanal, Aditya R.

AU - Mishra, Ashok

AU - Mottaleb, Kh A.

PY - 2014/2

Y1 - 2014/2

N2 - Corporate restructuring activities in the form of mergers and acquisitions (M&As) are ongoing in the U.S. ethanol-based biofuel industry. With regard to M&As, a widespread concern is about financial performance of an individual firm and stable financial performance of the overall industry. Using an event analysis method, this study explores the impact of recent M&As on stock prices and value of the firm of publicly traded ethanol-based biofuel industry between 2010 and 2012 in the United States. Results regarding the average cumulative abnormal returns of acquiring firms suggest that the market positively responded toward recent M&As in the industry. Around 4% positive growth on a 60-day event window was attributed to M&As using market-adjusted market portfolio. A significant positive 0.47% gain in cumulative returns in a 4-day event window and a 2.7% positive gain in a 10-day event window were suggested by this study.

AB - Corporate restructuring activities in the form of mergers and acquisitions (M&As) are ongoing in the U.S. ethanol-based biofuel industry. With regard to M&As, a widespread concern is about financial performance of an individual firm and stable financial performance of the overall industry. Using an event analysis method, this study explores the impact of recent M&As on stock prices and value of the firm of publicly traded ethanol-based biofuel industry between 2010 and 2012 in the United States. Results regarding the average cumulative abnormal returns of acquiring firms suggest that the market positively responded toward recent M&As in the industry. Around 4% positive growth on a 60-day event window was attributed to M&As using market-adjusted market portfolio. A significant positive 0.47% gain in cumulative returns in a 4-day event window and a 2.7% positive gain in a 10-day event window were suggested by this study.

KW - Acquisitions

KW - Bioenergy

KW - Biofuel

KW - Ethanol

KW - Event analysis

KW - G34

KW - Mergers

KW - Q20

KW - Q42

KW - Q43

UR - http://www.scopus.com/inward/record.url?scp=84893805268&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84893805268&partnerID=8YFLogxK

U2 - 10.1016/j.biombioe.2013.12.004

DO - 10.1016/j.biombioe.2013.12.004

M3 - Article

AN - SCOPUS:84893805268

VL - 61

SP - 138

EP - 145

JO - Biomass and Bioenergy

JF - Biomass and Bioenergy

SN - 0961-9534

ER -