CROSS-BORDER MERGERS AND ACQUISITIONS BETWEEN INDUSTRIALIZED AND DEVELOPING COUNTRIES: US AND INDIAN MERGER ACTIVITY

Abstract

In this paper we study the cross border mergers and acquisition between the US. and Indian fi rms. Our empirical work suggests that US fi rms realize signifi cant losses on the announcement of acquisitions of Indian targets while Indian targets realize signifi cant gains on the announcement of mergers with US acquirers. Publicly-traded Indian fi rms realize insignifi cant returns on their announcement of acquisitions of publicly-traded US fi rms but realize signifi cant positive returns on announcements of acquisitions of privately-held US fi rms and subsidiary fi rm targets. Publicly-traded US targets realize insignifi cant gains when US acquired by Indian fi rms.