Market Response to the Announcement of Mergers and Acquisitions: An Empirical Study from India

Neelam Rani (), Surendra S. Yadav and P.K. Jain

Vision, 2013, vol. 17, issue 1, 1-16

Abstract: The present article examines the short-run abnormal returns to India based mergers and acquisitions during 2003–2008 by using event study methodology. The present work is based on a sample of 623 mergers and acquisitions. We find that acquisitions by Indian companies significantly create short-term wealth on the announcement day to the shareholders of acquiring companies. Cumulative average abnormal return (CAAR) for Indian companies’ merger and acquisition activities is 2 per cent (significant at 1 per cent) over event window of 11 days (−5, +5). It seems the market perceives the merger and acquisition activities by Indian companies as efficiency enhancing. However, the results indicate presence of high event-induced variance in abnormal return. The present study reports a high event-induced variance in the abnormal return due to the announcement of mergers and acquisition in Indian context.

Keywords: Mergers; Acquisitions; Event Methodology; Abnormal Returns; Cumulative Average Abnormal Returns (CAAR); Event Window; Synergy (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0972262912469558 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:vision:v:17:y:2013:i:1:p:1-16

DOI: 10.1177/0972262912469558

Access Statistics for this article

More articles in Vision
Bibliographic data for series maintained by SAGE Publications ().