Journal of Finance and Accounting 2016; 4(4): 157-163 http://www.sciencepublishinggroup.com/j/jfa doi: 10.11648/j.jfa.20160404.11 ISSN: 2330-7331 (Print); ISSN: 2330-7323 (Online) The French Companies and Their Stock Market Performance at the Launch of Corporate Acquisition Programs Omar Boufama Faculty of Economic and Management Sciences, 20 August 1955 University, Skikda, Algeria Email address: o.boufama@univ-skikda.dz To cite this article: Omar Boufama. The French Companies and Their Stock Market Performance at the Launch of Corporate Acquisition Programs. Journal of Finance and Accounting. Vol. 4, No. 4, 2016, pp. 157-163. doi: 10.11648/j.jfa.20160404.11 Received: March 23, 2016; Accepted: May 11, 2016; Published: June 7, 2016 Abstract: This paper presents an econometric analysis of the profitability generated at the initiation of the corporates acquisition programs by French investors. These programs generally launched by the firms directors, need to have a high frequency of acquisition attempts, in order to cover fixed costs of the program and generate profits, which they increase the value of the firm and enrich the shareholders. Our empirical study applied on a sample of French companies of various economics branches gives a controversial result. Indeed, the sample of study made up of 46 firms of any size over a period of 11 years from 1997 to 2007, shows that only the hypothesis of the announcement effect was been verified. In the sub-sample of the studied companies, the acquisition programs of two “SMEs” namely Guerbet and Sartorius had a positive value, what proves their financial performance. These results show that the corporate acquisition programs are projects of value-creating investment for French small and medium enterprises. However, generally, for the sample of study, the French companies considered as frequent bidders on French acquisition market indicate clearly that firm’s acquisition programs during the study period were destructive of value. It means they do not maximize the value of the firm nor the stockholder’s wealth. Keywords: Acquisition Program, Announcement Effect, Economic Impact, Abnormal Return, Profitability, Acquisition Attempts 1. Introduction One of the aim objective of merger and acquisition (M&A) operations for the acquiring firms is to operate an external expansion with the aim of getting bigger and developing. Our empirical study [5] in which we evaluate the profitability of corporates acquisition programs; try to specify stocks price reactions at the announcement of M&A operations. It is a question particularly to verify if the partially anticipated events by the French acquirers generates consistent returns, which can be compared with those of the American case 1 . The actual financial literature about this subject largely try to calculate the gains associated to the acquisition attempts for both, acquirers and target firms. Another point treated in this literature focus on the identification of the impact of 1 This study presents a part of my PhD thesis, which tends to estimate the performance of the French acquisition programs. these operations on the shareholders wealth. Song and Walkling [11] argues that at any point in time, a firm’s market value is a weighted average of the values of the firm under current and alternative management where the weights are the probability of the firm being controlled by the various managerial teams. Acquisition attempts will occur when the expected gain from an acquisition attempt exceeds the cost. Malatesta and Thompson [8] provide evidence on the acquisition programs profitability for American case. Both researchers are the first ones who established an econometric model, allowing estimating the value of an acquisition program. Previously, Schipper and Thompson [10] realized an empirical study in which they measure the impact of acquisitions activity on firm value by differentiating between specific merger events and programs of acquisition activity. Through a sample of conglomerate acquirers, they find significantly positive abnormal returns associated with the