The role of patents in M&A transactions in Scandinavia : An event study of patents´ effect on short-term shareholder return for acquirers and targets
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- Master Thesis 
This thesis investigates whether patents affect the acquirer´s or the target´s cumulative average abnormal returns on M&A announcements in Scandinavia. The event study methodology check for the abnormal shareholder returns over a [-2020] event window. The two samples consist of announcement returns for 103 acquirers and 74 targets from 01.01.2001 to 15.11.2021. The sample only includes majority acquisitions. The M&A data is collected from SDC Platinum and Bloomberg Terminal, while the patent data is collected from Google Patents. This study uses the natural logarithm of patents to determine its effect on the acquirer´s return The results show that patents' effect on shareholder returns is statistically significant for acquiring companies that already have a patent. The effect is significant. On the other hand, there is no significant evidence on the acquirer´s shareholder value if the target has a patent or the total number of patents in the deal. In the event windows [-22] and. [-11] a one percent increase in patents averagely yields a 0.025 percent and 0.018. percent increase in acquirer’s shareholder value, respectively. The effect is significant at a 5 percent level. Moreover, the effect is more significant when looking at deals where the acquirer is the only party with a patent. A two-sided t-test tests the effect of a target patent dummy variable on the target´s shareholder value for seven different event windows. The t-tests indicate no significant effect in any of the event windows, and this thesis shows no evidence for patents increasing the target´s shareholder return.