Acquisitions of artificial intelligence companies. What are the effects for the acquiring firms’ stock price?

Abstract

In a sample of acquirer companies from USA, which are dominant in the field of artificial intelligence, I analyze the returns after M&A activity. I find that the cumulative abnormal returns are higher for the targets that are related to artificial intelligence. Consistent with previous results, I also find that returns tend to be higher if the acquisition is not domestic, implying that returns of acquisitions of domestic companies not related to artificial intelligence are the lowest.