Acquisition Pricing in India During 1995-2011: Have Indian Acquirers Really Beaten the Odds?

47 Pages Posted: 17 Sep 2012 Last revised: 18 Sep 2013

Pradip Banerjee

National Institute of Industrial Engineering

Prithviraj Banerjee

Globsyn Business School (GBS)

Soumen De

Menlo College

Jan Jindra

U.S. Securities and Exchange Commission - Division of Economic and Risk Analysis

Jayanta Nath Mukhopadhyaya

Globsyn Business School; IIM Rohtak

Date Written: July 17, 2013

Abstract

We examine the announcement returns of acquisitions made by Indian firms during the period 1995 to 2011. Our results confirm that the announcement returns to Indian acquirers are on average significantly positive. However, we are first to document that the announcement returns to Indian acquirers decline over time and become, on average, negative towards the end of our sample period. We analyze several hypotheses for such decline and find that the decline, while robust to a variety of explanations, is related to the intensity of the market for corporate control in India. Finally, the post-acquisition long-run returns for acquirers are, on average, consistently positive, do not change over time, and are unrelated to the initial market reaction to the acquisition announcement.

Keywords: Mergers and acquisitions, India, corporate governance, market for corporate control

JEL Classification: F30, G30, G32, G34, G38

Suggested Citation

Banerjee, Pradip and Banerjee, Prithviraj and De, Soumen and Jindra, Jan and Mukhopadhyaya, Jayanta Nath, Acquisition Pricing in India During 1995-2011: Have Indian Acquirers Really Beaten the Odds? (July 17, 2013). Journal of Banking and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2147624 or http://dx.doi.org/10.2139/ssrn.2147624

Pradip Banerjee

National Institute of Industrial Engineering ( email )

Vihar Lake
Powai
Mumbai, MA 400087
India

Prithviraj Banerjee

Globsyn Business School (GBS) ( email )

Sector V
Salt Lake
Kolkata, West Bengal 700091
India

Soumen De (Contact Author)

Menlo College ( email )

1000 El Camino Real
Atherton, CA 94027
United States

Jan Jindra

U.S. Securities and Exchange Commission - Division of Economic and Risk Analysis ( email )

44 Montgomery Street
San Francisco, CA 94104
United States

Jayanta Nath Mukhopadhyaya

Globsyn Business School ( email )

Sector V
Salt Lake
Kolkata, West Bengal 700091
India
9830275679 (Phone)

IIM Rohtak ( email )

Maharshi Dayanand University
Delhi Rd
Rohtak, Haryana 124001
India

Paper statistics

Downloads
123
Rank
189,276
Abstract Views
589