TY  - JOUR
T1  - An Impact of Mergers and Acquisitions on Stock Price Behaviour of
Acquiring Pharmaceutical Companies
AU - Suresh, N. AU - Abhishek, G. 
JO  - Journal of Engineering and Applied Sciences
VL  - 14
IS  - 20
SP  - 7529
EP  - 7534
PY  - 2019
DA  - 2001/08/19
SN  - 1816-949x
DO  - jeasci.2019.7529.7534
UR  - https://makhillpublications.co/view-article.php?doi=jeasci.2019.7529.7534
KW  - Acquisitions
KW  -wealth effects
KW  -abnormal returns
KW  -cumulative returns
KW  -future expectations
KW  -shareholders
AB  - In India, Pharma sector has been witnessed an acceptable growth in terms of mergers and acquisitions
deals. In past few years, Indian Pharma companies have adopted the trend of mergers and acquisition deals
between Foreign companies and domestic and firms. This study analyses the impact of mergers and
acquisitions on profitability and stock price behaviour of acquiring companies by applying 27 days event
window, the impact of such decision on the acquiring companie’s share price. The data of share price at market
price are collected for a period of 6 years [-3, 0, +3] event period. This study examines the effect on
the share price by finding the abnormal return of the share price of acquiring companies using a 27 days
[-13, 0, +13] day and 7 days [-3, 0, +3] event period. The expected return on the stock for each day was
calculated using the CAPM Model. To analyze the stock price behavior "Autoregressive Conditional
Heteroscedasticity" (ARCH) Model is used. Results reveals that, there has not been any remarkable effect of
the abnormal return, performance of the market price developments are not only affected by the present figures
but also, relates to several past information and future expectations of the share price. However, a fall in
Cumulative Abnormal Return (CAR) has been noted which might be because of the fear of the failure of the
acquisition in the minds of the shareholders.
ER  -