Open AccessImpacts of bank mergers on shareholder's wealth
Author(s) -
Arun Kumar,
Kameshwar P Yadav,
Altaf Mallik,
Piyush Gupta
Publication year - 2022
Publication title -
international journal of accounting, business and finance
Language(s) - English
Resource type - Journals
ISSN - 2583-2123
DOI - 10.55429/ijabf.v1i1.16
Subject(s) - event study , shareholder , business , sample (material) , mergers and acquisitions , financial system , stock (firearms) , stock market , monetary economics , economics , finance , corporate governance , mechanical engineering , paleontology , context (archaeology) , chemistry , chromatography , horse , engineering , biology
We examine the effect of the news about merger of six banks into four major banks, employing the standard event study method with the market model on a sample of four bidders and six target banks. We find significant impact of merger announcement on the bidder and target banks. While the bidder banks are negatively impacted, the target banks experience positive impacts on the event day and day after, followed by negative results later on. No previous study is found to have addressed this question on how the merger announcements impact the bidder and target bank's stock returns in India.