| Summary: | 碩士 === 國立中正大學 === 企業管理研究所 === 91 === On the trend of financial globalization and liberalization, the development of international financial institutions has moving forward to the establishment of financial holding companies. The purpose of such movement is to provide better mechanisms for integration and transformation of modern financial services. Based upon recent literatures related to the subject of merger and acquisition of financial institutions and operations of financial holding companies, this paper, using valuation techniques and event study methodology, try to discover the institutions’ valuation price and their market price reaction during the merger and acquisition announcements. The case of Fubon Financial Holdings Company (FFHC) merges Taipei Bank (TB) was chosen as our empirical sample. The results have shown as follow:
a.In terms of valuation methodology, cash flow discount model provides much better estimation to the market value of FFHC and TB.
b.Using event study, this paper find that from daily abnormal return, the acquiring firm, FFHC, doesn’t’ shown significant positive return around event day. However, it also doesn’t shows negative cumulative abnormal return before and after the event day.
c.On the other hand, the target firm, TB, show significant positive daily abnormal return around event day. However, it also shows positive cumulative abnormal return before and after the event day.
d.However, when we combine the sample companies, FFHC and TB together, the result does not show significant price effect in terms of their abnormal return (AR) and cumulative abnormal return (CAR). However, Positive and negative results from the acquiring firm (FFHC) and the target firm (TB), respectively have cancelled out their effect from our test.
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