Announcement Effect of Cross Border M&A on Indian Acquiring Firms

Nagar, Pranav (2008) Announcement Effect of Cross Border M&A on Indian Acquiring Firms. [Dissertation (University of Nottingham only)] (Unpublished)

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Whenever there is an announcement about a merger, especially a cross-border merger, there is an excitement and expectation among the shareholders of the acquiring company. This expectation may or may not convert into an abnormal return. My dissertation identifies this abnormal return and 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 short-term. Though there are many variables involved in determining the overall success of any merger, the immediate market reaction is sufficient to establish a criterion for success.

I have chosen cross-border mergers between the Indian acquiring companies and European target companies as the basis of my study. The Indian M&As market is growing at a remarkable speed and has good future prospects. The lack of research on cross-border M&As in India makes my study an interesting addition to the existing literature.

An interesting fact that emerged from this study is the significant abnormal gain before the announcement of merger. This indicates the probability of insider trading in the Indian stock markets. This study shows that the announcement effect has a very short-lasting effect and the abnormal gains are only seen on the day of the announcement. This study also reveals that shareholders do gain abnormal returns around the date of the announcement. However, this gain is due to the price pressure effect and not the announcement effect.

Item Type: Dissertation (University of Nottingham only)
Keywords: Cross border, M&A, India
Depositing User: EP, Services
Date Deposited: 02 Feb 2009
Last Modified: 13 Apr 2018 20:18

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