Title: Does board independence, ownership structure, and group affiliation impact the acquiring companies' announcement returns in India?

Authors: Reena Nayyar; Sanjay Dhamija; Shikha Bhatia

Addresses: IMI Delhi, B-10, Qutab Institutional Area, Tara Crescent, New Delhi, 110016, India ' IMI Delhi, B-10, Qutab Institutional Area, Tara Crescent, New Delhi, 110016, India ' IMI Delhi, B-10, Qutab Institutional Area, Tara Crescent, New Delhi, 110016, India

Abstract: The study evaluates the impact of board independence, ownership concentration, and business group affiliation on the acquiring companies' announcement returns in India. The analysis is conducted through standard event study methodology and cross-sectional regression analysis. The results indicate that the independent board of directors fails to obviate the conflict of interest between the controlling and the minority shareholders in mergers and acquisitions pursued by business-group-affiliated, Indian acquiring companies, with promoters as the dominant shareholders. Thus, the results corroborate the entrenchment theory and negate the applicability of monitoring theory in the Indian M&A context. The study adds to the existing literature on M&As, corporate governance, and business groups by analysing how the critical interactions between board independence, ownership concentration, and business group affiliation impact the value creation in M&As in India. The study offers implications for the regulator, the Securities and Exchange Board of India (SEBI).

Keywords: mergers and acquisitions; M&As; corporate governance; board independence; ownership concentration; business groups; India.

DOI: 10.1504/IJCG.2025.148920

International Journal of Corporate Governance, 2025 Vol.15 No.3, pp.307 - 334

Received: 22 Jan 2025
Accepted: 25 Jul 2025
Published online: 02 Oct 2025 *

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