CROSS BORDER MERGERS & ACQUISITIONS AND ITS EFFECT ON SHAREHOLDERS WEALTH IN INDIA Gorav Bansal

ABSTRACT

The business environment at national and International level is fast changing and to cope with this change corporate have adopted different growth strategies. These growth strategies adopted includes both organic and inorganic routes. Mergers and Acquisitions are one of the popular inorganic growth route adopted by companies, more so in case of developing countries like India. This study looks at the effect of such a strategic decision on the shareholders wealth. The study, done from the acquiring firm shareholders perspective, adopts a standard event study method to know the short term effect of an acquisition announcement on the shareholders wealth. The study is for the announcements made during the period from 2000 to 2010. The study reveals that the shareholders of the acquiring companies gain small positive abnormal returns in and around the announcement period.

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