Impact of cross-border acquisitions' announcements on shareholders' wealth: evidence from India Online publication date: Thu, 15-Oct-2015
by Neelam Rani; nr@iimshillong.in Yadav; P.K. Jain
Global Business and Economics Review (GBER), Vol. 17, No. 4, 2015
Abstract: This study analyses 268 cross-border acquisitions of Indian acquirer companies to capture the returns to shareholders as a result of the acquisition announcements during the period January 2003 to December 2008 using the event study methodology. We focus on cross border acquisitions, stake-wise acquisitions, considering the target firm both from developed market as well as from emerging market. Acquisitions of targets from developed markets are further analysed among target from USA and from other developed markets. Indian stock market reacts positively to the announcements of cross-border acquisitions. We find that Indian acquirers experience positive and significant abnormal returns of 4% over days (−5, +5) for cross-border acquisitions. We also find that cross-border acquisitions of targets from developed markets outperform acquisitions of targets from emerging markets. The acquirers of full control (control of more than 74% stake) experience a higher gain than the acquirer of majority stake between 51 and 74%.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the Global Business and Economics Review (GBER):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com