Stock Performance within the Logistics Industry: The Case of CTT

This paper examines the stock performance of acquiring firms following Mergers and Acquisitions (M&A) in the global logistics and transportation industry. Inspired by CTT – Correios de Portugal’s acquisition of CACESA, the study complements fundamental equity analysis by identifying key drivers of shareholder value in both the short and long term. Using a global sample of M&A deals from 1995 to 2024, it applies standard event study methodology to compute Cumulative Abnormal Returns (CAR) for the short term and Buy-and-Hold Abnormal Returns (BHAR) for the long term. Cross- sectional regressions explore the factors influencing these returns. The results highlight wide variation in M&A outcomes. Strong pre-announcement stock momentum supports positive returns, but this is offset by discounts for large acquirers and high-valuation firms – consistent with the ‘acquirer size effect’ and ‘glamour curse.’ Environmental performance shows a U-shaped effect, positively impacting both short- and 36-month returns. Drivers of performance also vary across sub-sectors and firm sizes. The CTT case illustrates how positive momentum and mid-cap status may explain the market’s favorable reaction, aligning with broader findings. The study offers a practical framework for managers, analysts, and investors to assess M&A deals. It enhances traditional models by incorporating statistically significant drivers observed over decades. For managers, it cautions against large-scale deals from weak positions. For investors and analysts, it supports skepticism toward large-cap, high- multiple acquirers and highlights the value of including environmental scores in long- term valuations.