Agarwal, Ankita (2009) MERGERS AND ACQUISITIONS IN INDIA. [Dissertation (University of Nottingham only)] (Unpublished)

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From the past few decades, Mergers and Acquisitions (M&A) have dominated the

environment in which the companies operate. Whenever there is an announcement about

a merger, there is an excitement and expectation among the shareholders. This

expectation may or may not convert into an abnormal return. It is useful to have some

kind of research activity on the performance of M&A, as both bidders and target firms

will gain from it. The results have revealed that on average, the returns to the target

companies are positive and that they gain from mergers. However, the bidder returns may

be zero or negative, but it turns out be a different story in the long run.

My dissertation identifies the performance of 86 Mergers and Acquisitions in India and

the primary objective for this study will be to examine the change in firms share prices

and the impact of mergers and acquisition on the returns to the shareholders of both

bidder and target firms surrounding the announcement days. It then attempts to verify the

significance of the same in the short-term. Whether the abnormal returns are significant

to the announcement of the merger, determines the success of the merger in the shortterm.

The research also estimates the beta coefficient for 86 bidder and target firms,

during the announcement period (10 days before the announcement day and 19 days after

the announcement days) and before the announcement period (ranging from150 days to

11 days before announcement). I have also shown some statistical test to see if the

changes in the beta coefficient and required returns are significant or not Further, the

research is based on types of mergers factor (Horizontal and non-horizontal) which might

be closely related and give different returns to the target shareholders and bidder

shareholders on the days surrounding the announcement.

The event study methodology has been employed to assess the performance of both

bidder and target firms surrounding the announcement days. The results of the event

study reveal that on an average, the bidder companies experience a negative cumulative

average abnormal returns (CAAR) of -1.03% and the target companies experience a

positive CAAR of 12.074%

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 07 Sep 2009 12:02
Last Modified: 21 Dec 2017 01:55

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