Domestic mergers and acquisitions in BRICS countries: Acquirers and targets |
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| Affiliation: | 1. Business School, University of Edinburgh, Edinburgh EH8 9JS, United Kingdom;2. Accountancy, Economics, and Finance Department, Heriot-Watt University, Edinburgh EH14 4AS, United Kingdom;3. Cairo University Business School, Egypt;1. Wesleyan University, 238 Church Street, Middletown, CT 06459, United States;2. University of California Berkeley Law School;1. School of Business, Southern New Hampshire University, 2500 N. River Rd., Manchester, NH 03106, USA;2. Business Administration Division, Mahidol University International College, 999 Phutthamonthon 4 Road, Salaya, Nakhonpathom 73170, Thailand;1. DePaul University, Department of Finance, 1 E. Jackson Blvd., Chicago, IL 60604, United States;2. Dalhousie University, Keneth Rowe Management Building, 6100 University Avenue, Halifax, NS, B3H4R2, Canada;3. DePaul University, Department of Finance, 1 E. Jackson Blvd., Chicago, IL 60604, United States |
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| 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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