Does financial advisory add value to M&A transactions in the pharmaceutical industry?

Abstract

This study investigated if financial advisors contribute to value creation in M&A transactions in the pharmaceutical industry, using an event study methodology. Based on 294 transactions worldwide between 2012-2016, an average of 3.03% positive cumulative abnormal return was found, significant at a 1% level. Using OLS and Heckman least square regressions, no significant effect of employing a financial advisor was found, no matter if the advisor was a top-tier or non-top-tier financial advisor.