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Takeovers as a Way of Investing Versus Dividend Payments on the Warsaw Stock Exchange

Vol. 5, No 1, 2012

Leszek Czerwonka

University of Gdansk


Takeovers as a Way of Investing Versus Dividend Payments on the Warsaw Stock Exchange


Abstract. The aim of this study is to investigate the relationship between participation in merger transactions, and paying dividends. Acquiring companies should pay higher than average dividends, because a great number of studies show that on average they have lower prices. However, it is rather improbable that companies which need money for external growth transactions are eager to share their profits with their shareholders. Therefore, the research hypothesis of this study is a statement that the company engaged in the acquisition of other entities pays lower dividends on average in comparison to other companies. The study was based on a sample of companies listed on the Warsaw Stock Exchange, which were involved in merger transactions as the acquiring party. The method used is statistical analysis of dividend indicators. The period ofanalyses are from the year 2000 to 2009.


Keywords: Dividends, dividend yield, mergers, acquisitions, Poland.

JEL classifi cation: G32, G34, G35.