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Informativeness of Announcement Returns in Cross-border Acquisition Completion: A Perspective from Emerging Economies

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  • Sugandh Ahuja
  • Shveta Singh
  • Surendra Singh Yadav

Abstract

This study examines the informative role of announcement returns in the deal-closing decision for cross-border acquisitions from emerging economies. Using a sample of 903 acquisitions from five emerging economies: Brazil, Russia, India, China, and South Africa (BRICS), we find that the likelihood of deal completion increases if the market reacts favorably at the time of announcement. Further, we investigate if the relationship between announcement returns and deal completion becomes more significant under increased information asymmetry. Empirical results attest that the relationship between the market reaction and deal completion becomes more pronounced in unrelated deals and deals without advisors. JEL Codes : G14, G34

Suggested Citation

  • Sugandh Ahuja & Shveta Singh & Surendra Singh Yadav, 2024. "Informativeness of Announcement Returns in Cross-border Acquisition Completion: A Perspective from Emerging Economies," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 23(4), pages 424-449, December.
    • Handle: RePEc:sae:emffin:v:23:y:2024:i:4:p:424-449
    DOI: 10.1177/09726527241247975
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    More about this item

    Keywords

    Acquisitions; deal completion; information asymmetry; announcement returns; emerging economies;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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