![Open Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextgreen.png)
![Restricted Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextred.png)
Do Acquirers Gain Real Wealth? : A Long Term Study in India
Subscribe/Renew Journal
The present paper analyzed long term performance of M&A deals in India in terms of growth in shareholder value of acquirers in real terms and compared it with growth in nominal terms. It tried to understand whether M&A deals contribute to shareholder wealth of acquirers in real terms in comparison to nominal terms. We performed sectoral as well as overall analysis of a sample of 174 deals. We analyzed performance in three ways; in the form of growth of shareholder wealth of acquirers in nominal terms, growth of shareholder wealth of acquirers in real terms, and finally, a one on one comparison of performance in nominal terms vis a vis real terms. The study covered domestic M&A deals in India over a period of 1989 to 2014 involving Bombay Stock Exchange (BSE) listed acquirers. The model used for study is BHAR (Buy and Hold Abnormal Return) and a modification of BHAR, that is, RBHAR (Real Buy and Hold Abnormal Return). We did not find any significant difference between the test results of BHAR and RBHAR on a standalone basis. However, when we compared the performance of BHAR and RBHAR on a one to one basis, we found that the performance of M&A deals in auto and IT sectors in real terms was better than in nominal terms. Overall, M&A performance in real terms was also better than that in nominal terms.
Keywords
Mergers, Acquisitions, Bhar, Inflation, Real Returns, Real Wealth, India, Event Study, Acquirer's Returns, Acquirer's Wealth, Shareholder Wealth
G30, G31, G32, G34, E30, E31
Paper Submission Date : May 11, 2016 ; Paper sent back for Revision : September 12 , 2016 ; Paper Acceptance Date : January 29, 2017.
User
Subscription
Login to verify subscription
Font Size
Information
![](https://i-scholar.in/public/site/images/abstractview.png)
Abstract Views: 157
![](https://i-scholar.in/public/site/images/pdfview.png)
PDF Views: 0