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Impacts of bank mergers on shareholder's wealth

Author

Listed:
  • Arun Kumar Rai
  • Kumari Preeti Yadav
  • Altaf Mallik
  • Piyush Gupta

Abstract

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.

Suggested Citation

  • Arun Kumar Rai & Kumari Preeti Yadav & Altaf Mallik & Piyush Gupta, 2021. "Impacts of bank mergers on shareholder's wealth," International Journal of Accounting, Business and Finance, Indian Accounting Association, Patna Branch, vol. 1(1), pages 8-14.
    • Handle: RePEc:dbs:ijabfi:v:1:y:2021:i:1:p:8-14:id:16
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    References listed on IDEAS

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    1. Pandey, Dharen Kumar & Kumari, Vineeta, 2021. "Event study on the reaction of the developed and emerging stock markets to the 2019-nCoV outbreak," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 467-483.
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