Effects of Mergers and Acquisitions on Shareholder Wealth: Event Study for Latin American Airlines
Cortés, Lina M.
García, John J.
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This study analyzes the effectof changes in corporate controlon the way shareholdersbenefit from the announcements of selling and buying airlines, thus contributing to the literature on mergers and acquisitions (M&As) in emerging markets. Using a methodologyof event study, including GARCH and OLS models, we find evidence that some selling companies obtain abnormal returns that are statisticallysignificant after the announcement of the M&A. However, when the merger is not strategic, the companies present statisticallysignificant negative abnormal returns. The resultsare not conclusive when analyzing the effecton the valueof the buying companies.