A quantitative study of value creation and merger and acquistion activity in the U.S. semiconductor industry

by Triebell, Robert W., Sr., Ph.D., CAPELLA UNIVERSITY, 2015, 128 pages; 3718662

Abstract:

The present study investigated the relationship between merger and acquisition (M&As) activity and shareholder value in publicly-traded, U.S.-based companies in the semiconductor industry during a 5-year time period from 2003 to 2007. While research on M&As has been fairly extensive, research on M&As in specific technological fields such as the semiconductor industry has been limited. The semiconductor industry is important as it enables technological advancement and acts as a key driver of economic growth for the rest of the high-tech industry. The research also attempted to close the gap in knowledge in terms of shareholder value creation in technology acquisitions. Successful M&As generate value through the creation of improved goods and services, while failed M&As result in high costs to both the human and financial capital of an organization and its stakeholders. Shareholder value was determined based on a correlation analysis of stock price, total investment return, return on equity (ROE), total revenue, and net income in relation to the number of M&As completed and the total value of the M&As completed by a sample of U.S.-based semiconductor companies during the specified 5-year time period. The research focused on the acquiring firm and utilized data collected and published in publically available industry sources. No statistically significant correlations were found between the either the number or the value of M&As completed and a company’s value in terms of stock price, investment return, ROE, or net income. The only statistically significant correlation was between total revenue and the total value of M&As completed.

AdviserMary Evans@Kasala
SchoolCAPELLA UNIVERSITY
Source TypeDissertation
SubjectsBusiness administration; Management
Publication Number3718662

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