Mergers and acquisitions (M&A) activities have been common research topics for decades, and there are numerous methods being developed to analyze the financial status or predict the performance of a company. In this thesis, companies are classified into two groups, as “healthy” and “unhealthy” bidders based on the financial leverage ratio and interest coverage ratio. I compared the performance of the “healthy” bidders group and the “unhealthy” bidders group over both the 60-trading day short and 42-month long term. The empirical results indicate that shareholders of “healthy” bidders gain from the takeover decision in general, while the shareholders of “unhealthy” bidders lose. In addition, a significant relationship is observed between the bidders’ financial health and their announcement abnormal returns, with “healthy” bidder shareholders achieving higher abnormal returns.