This paper aims to analyze the behavior of stock returns in mergers and acquisitions. Companies are trying to consolidate themselves in the areas of their core competence and divest those businesses where they do not have any competitive advantage. Consequently, as an option, mergers and acquisitions has emerged as a key corporate activity. One plus one makes three, this equation is the special alchemy of a merger or an acquisition. Many studies have been conducted to assess the value creation when two or more companies merge, or when one company acquires another. Most of these studies have concentrated on combined benefits of both the acquiring and target companies, or more specifically the acquiring companies. It is equally important to analyze value creation from the view poin t of the target company's shareholders. The paper analyses the value creation for target companies' shareholders in the Indian context.
Keywords
Merger, Acquisition, Synergy, Shareholder Value Creation, Nifty, Public Announcement, Open Offer, Takeover.
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