Abstract
The restaurant industry experienced numerous merger and acquisition activities in the 1990s. This study examined cumulative abnormal returns for both target and bidding firms of restaurant mergers and acquisitions for the last 20 years. It is found that restaurant targets enjoy significantly positive returns, consistent with most of the literature on merger and acquisition targets. Restaurant industry bidders as an overall group earn slightly positive but not statistically significant returns in this study. The significant positive returns for targets indicate that there may be synergistic gains from mergers and acquisitions.