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Acquisition pricing in India during 1995–2011: Have Indian acquirers really beaten the odds?

Pradip Banerjee, Prithviraj Banerjee, Soumen De, Jan Jindra and Jayanta Mukhopadhyay

Journal of Banking & Finance, 2014, vol. 38, issue C, 14-30

Abstract: We examine the announcement returns of acquisitions made by Indian firms during the period 1995–2011. Our results confirm that the announcement returns to Indian acquirers are on average significantly positive. However, we are first to document that the announcement returns to Indian acquirers decline over time and become, on average, negative towards the end of our sample period. We analyze several hypotheses for such decline and find that the decline, while robust to a variety of explanations, is related to the intensity of the market for corporate control in India. Finally, the post-acquisition long-run returns for acquirers are, on average, consistently positive, do not change over time, and are unrelated to the initial market reaction to the acquisition announcement.

Keywords: Mergers and acquisitions; India; Corporate governance; Market for corporate control (search for similar items in EconPapers)
JEL-codes: F30 G30 G32 G34 G38 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:38:y:2014:i:c:p:14-30

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