Mergers & Acquisitions and Their Impact on Shareholder Wealth: A Case-Based Econometric Analysis

This study investigates the impact of mergers and acquisitions (M&A) on the shareholder wealth of acquiring firms using a case-based event-study and econometric approach. Daily stock-price data for selected Indian listed companies were analysed over an event window of -10 to +10 days using the market model to calculate abnormal returns. The findings reveal significant positive Average Abnormal Returns (AAR) around the announcement date, with Cumulative Abnormal Returns (CAR) of 2.82% (-3, +3) and 4.10% (-10, +10), indicating strong short-term wealth creation. Regression analysis further shows that deal size, cross-border nature, and cash mode of payment positively influence shareholder returns, while high leverage negatively affects market reaction. The study concludes that M&A announcements in India generate favourable short-term investor responses, although long-term effects remain mixed and firm-specific. These insights contribute to understanding value creation in emerging-market M&A