Dludla, Sambulo Siyanda2025-06-172024Dludla, Sambulo Siyanda. (2024). nformation Asymmetry and Merger Performance on the Johannesburg Stock Exchange [Masters dissertation, University of the Witwatersrand, Johannesburg]. WIReDSpace. https://hdl.handle.net/10539/45138https://hdl.handle.net/10539/45138A research report submitted in fulfillment of the requirements for the Master of Laws, In the Faculty of Faculty of Commerce, Law and Management, School of Law, University of the Witwatersrand, Johannesburg, 2024This study examines the impact of information asymmetry on the long-term performance of mergers and acquisitions (M&A) on the Johannesburg Stock Exchange (JSE). The empirical test evaluates the 3-year period of share performance from 2001 to 2019. An event study methodology is utilized to evaluate the relationship between information asymmetry and M&A performance after the deal's completion. The study interrogates the relationship between information asymmetry through proxies and the M&A performance measures (BHAR & CAAR) and the relationship between the deal specific variables and the M&A performance measures. The results reveal several information asymmetry proxies (SPREAD, VOLATILITY, TRADED VOLUME, and TRADED VALUE) exhibit a statistically significant relationship with one or more M&A performance measures in the panel OLS fixed effects model. However, ANALYST COVERAGE was not statistically significant for M&A performance. This suggests that information asymmetry impacts M&A transactions on the JSE on the long run. Additionally, mixed results are observed in the Generalised Method of Moments (GMM) regression. When observing deal-specific variables, the panel OLS regression emphasises their significant relationship with M&A performance, particularly against the CAAR, rejecting the null hypotheses for cash, mixed, size, leverage, and value variables at a 1% or 5% level. Controlling for the financial industry, both panel OLS regression and GMM show a significant relationship between CAAR, which is consistent with Harford's (2005) concept of M&A waves and industry clustering. This emphasises the critical role of industry dynamics on M&A performance. The results suggest that management and investors need to be aware of the information asymmetry in the market when conducting and concluding an M&A transaction. Moreover, management and investors must be aware of the information asymmetry in the market in the long run post-merger.en© 2024 University of the Witwatersrand, Johannesburg. All rights reserved. The copyright in this work vests in the University of the Witwatersrand, Johannesburg. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of University of the Witwatersrand, Johannesburg.DissertationUniversity of the Witwatersrand, JohannesburgSDG-8: Decent work and economic growth