Stock Price Reactions to M&A
Journal Title: International Journal of Business and Management Invention - Year 2019, Vol 8, Issue 1
Abstract
Mergers and Acquisitions form a very important and vital activity for the expansion of companies and various articles and research has been undertaken in the area. Thisresearch examines if there are shortterm impact on the returns that can be attributed to the completion of Mergers and Acquisitions. The event study methodology is used to analyse 4 different mergers from 2018 and a total of 8 companies are looked into. A comparative study of pre and post-merger scenario is undertaken andthe main aspect that is looked into isif the completion of the Merger has an effect on the Stock Prices. The Capital Asset Pricing Model and T-Test were the tools employed for analysis and it was found that there was no significant impact on the stock prices of 2 companies, whereas in the other 6 companies, there was a positive impact on the stock prices of the companies. Evidence suggests that the cumulative returns in the event window have a major change due to the merger and acquisition of the concerned companies.
Authors and Affiliations
Ramya Srinivasan, Meenakshi Subbiah, Siddharth Gandhi
Keywords
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