An Empirical Analysis of Corporate Restructuring and Share Price Performance in India
Published: 2011
Author(s) Name: Dr. Yogesh C Joshi, Falguni H. Pandya
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Abstract
This paper presents an empirical study of the effect
of mergers and acquisitions on the return of shares of
acquirer and target fi rm. For this research, we have
taken all listed companies of BSE for which merger
and acquisition has taken place between 2000 and
2010. Total 80 samples are taken, among this 40 are
of mergers involving 20 of acquirer and 20 of target
fi rms, and 40 of acquisition involving 20 of acquirer and
20 of target fi rms. A comparative analysis of abnormal
gains of target fi rms involved in M & A reveals that
the abnormal gains of target fi rms of acquisition was
higher than target fi rms of merger. In the context of
news leakage of information, it can be suggested that
the investment strategies involving buying shares of
target fi rms prior to the announcement of a merger and
selling them off after the merger announcement could
result in profi table opportunities.
Keywords: Mergers and Acquisitions, Target fi rms,
Acquirer fi rms, Abnormal gains.
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