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Domestic mergers and acquisitions in BRICS countries: Acquirers and targets

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  • Kinateder, Harald
  • Fabich, Matthias
  • Wagner, Niklas

Abstract

We study the firm value determinants for domestic acquisitions within BRICS countries considering both acquirer and target shareholders. Targets earn significant positive announcement returns of 1.45% on average. Acquirers lose slightly. We employ a comprehensive set of explanatory variables and test for cross-sectional return drivers. Target returns are negatively related to pre-announcement returns and firm size, while they are positively related to GDP growth. Our results are consistent with insider trading capturing some of the target excess returns, which are highest for small targets based in countries with high recent GPD growth.

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  • Kinateder, Harald & Fabich, Matthias & Wagner, Niklas, 2017. "Domestic mergers and acquisitions in BRICS countries: Acquirers and targets," Emerging Markets Review, Elsevier, vol. 32(C), pages 190-199.
    • Handle: RePEc:eee:ememar:v:32:y:2017:i:c:p:190-199
    DOI: 10.1016/j.ememar.2017.06.005
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    5. Harald Kinateder & Kimberly Weber & Niklas F. Wagner, 2019. "Revisiting Calendar Anomalies In Brics Countries," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 22(2), pages 213-236, July.
    6. Evans Opoku‐Mensah & Yuming Yin, 2023. "Controlling shareholders' influence on acquisition decisions and value creation: An empirical study from China," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1965-1980, April.
    7. Gabriel J. Power & Neelam Rani & Anandadeep Mandal, 2022. "Corporate control and the choice of investment financing: the case of corporate acquisitions in India," Review of Quantitative Finance and Accounting, Springer, vol. 58(1), pages 41-68, January.
    8. Abdul Wajid & Anjim Sabiha & Shakeb Akhtar & Mosab I. Tabash & Linda Nalini Daniel, 2022. "Cross-Border Acquisitions and Shareholders’ Wealth: The Case of the Indian Pharmaceutical Sector," JRFM, MDPI, vol. 15(10), pages 1-17, September.
    9. Marcato, Gianluca & Sebehela, Tumellano & Campani, Carlos Heitor, 2018. "Volatility smiles when information is lagged in prices," The North American Journal of Economics and Finance, Elsevier, vol. 46(C), pages 151-165.
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    More about this item

    Keywords

    Announcement returns; BRICS countries; Emerging markets; Event study; Mergers and acquisitions;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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