Bidders’ short-term performance in mergers and acquisitions: Empirical evidence in Latin America

We analyze Bidder's abnormal returns around the announcement date for M&As in Latin America. The sample consists of 297 M&As announcement that took place between 2001 and 2019. The unique characteristic of this sample is that the bidder must be a company with its headquarter in Latin America. We report statistically significant average abnormal return for Bidder of 0.41% at the announcement date and 1.18% at a seven-days window (-3,+3). We also report significant abnormal returns if the M&A is a conglomerate (1,01% at the announcement date). If cash is the method of payment, we find a significant abnormal return of 0.89%, three days around the announcement date. Finally, we do not observe the deal size to be related to the abnormal performance of the bidder’s stocks. The evidence only shows significant results for the second quartile of volume size.