@unpublished{theses_frw4793,
            year = {2024},
           title = {The impact of Merger \& Acquisition announcements on Real Estate Investment Trust returns in the United States},
          author = {Lennard Kr{\"u}ger},
             url = {https://frw.studenttheses.ub.rug.nl/4793/},
        abstract = {This study examines the effect of merger and acquisition announcements on acquiring real estate investment trust (REIT) returns in the United States, analyzing a sample of 464 announcements dating from 1999 to 2024, employing the market and risk adjusted model by Brown and Warner (1985). Prevailing literature suggests that such announcements should lead to economics of scale and more efficient resource allocation, thus being appreciated by investors, leading to positive stock returns. The main variable of interest in this context is the average abnormal return, measuring the statistical deviation from observed returns and those that would have been expected without the M\&A announcement taking place. Furthermore, a sensitivity analysis is differentiating between M\&As of REITs operating within and outside the same industry, as well as within and outside the same state of residence, investigating if these M\&A characteristics are valuated differently. The main findings indicate that merger and acquisition announcements are associated with a statistically, but not economically, significant average abnormal return of -0.2\% for the acquiring party one day before the announcement. Cumulative average abnormal returns, the sum of average abnormal returns surrounding the event day, are statistically not significant over the entire five-day event window. Therefore, it can be inferred that merger and acquisition announcements in this sample of acquiring REITs can generally not be associated with abnormal REIT returns, suggesting that, in aggregate, investors do not react to named announcements. The same holds true for REIT M\&A announcements in the sensitivity analysis, with -0.3\% average abnormal returns two days after the M\&A announcement regarding the difference between M\&As within and outside the same industry and -0.68\% cumulative average abnormal returns over the five-day event window regarding the difference between M\&As within and outside the same state of residence.}
}