An Empirical Analysis on Long-Run Announcement Effects of M&A on the Shareholders Wealth: A Case Study of Indian Pharmaceutical and FMCG Sector

Before the period of liberalisation that marked its beginning in early 1990s, M&A were restrained through the protectionist policies introduced by the government of India. The liberalisation, privatisation and globalisation reforms marked the growth of M&As in India by introducing Indian firms to global markets thereby providing them an opportunity to create synergies. The growth in Indian M&A was then charged by the financial crisis and the administration of structural adjustment programme under the IMF. Indian economy being on the pace of rapidly developing economy has witnessed extensive growth in M&A which is visible across various sectors in the economy. This paper empirically analyses whether the M&A announcements of the Indian Pharmaceutical and FMCG Sector had a significant impact on the shareholders wealth in the long run during the period 1998-2017 using Buy and Hold Abnormal Returns (BHARs) Approach.