The Effect of Cross-Border Mergers and Acquisitions Performance on Shareholder Wealth: The Role of Advisory Services

Debi Prasad Satapathy (), Tarun Kumar Soni, Pramod Kumar Patjoshi and Divya Singh Jamwal
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Debi Prasad Satapathy: School of Commerce, XIM University, Bhubaneswar 751013, India
Tarun Kumar Soni: Finance Area, FORE School of Management, New Delhi 110016, India
Pramod Kumar Patjoshi: Finance Area, Centurion University of Technology and Management, R. Sitapur 761211, India
Divya Singh Jamwal: School of Business, Faculty of Management, Shri Mata Vaishno Devi University, Katra 182320, India

JRFM, 2025, vol. 18, issue 2, 1-16

Abstract: This study empirically examines the wealth effects of mergers and acquisitions (M&As) in the Indian capital market, focusing on cross-border M&As. This study considers a sample of 58 cross-border and 34 domestic M&As, comprising more than 50 percent of the shares acquired by the acquiring companies from 2004 to 2019. We analyzed the wealth effects of cross-border M&As by applying the event study methodology. The abnormal returns of domestic and cross-border mergers and acquisitions for various window periods were compared using an independent t -test. The wealth effects of the acquiring firm have been further investigated with the inclusion of top advisor services and without the inclusion of advisor services in mergers and acquisitions transactions. This result suggests that cross-border M&As do not create a significant positive return for shareholders. There is no considerable wealth gain for shareholders of acquiring companies in domestic and cross-border mergers and acquisitions. We also find that including top advisor services in the M&A process does not influence the acquiring firm’s wealth. The price-to-book value ratio of the acquiring firm is a significant determinant of its returns.

Keywords: mergers and acquisitions; event study; abnormal return; advisory services (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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