Impact of mergers and acquisitions on shareholders\' wealth: a study of Telecom sector of Pakistan

Salar Hussain; lowast; Imam ud Din Khoso; Fiza Qureshi

doi:10.17485/IJST/v13i21.615

Article

Impact of mergers and acquisitions on shareholders' wealth: a study of Telecom sector of Pakistan

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Indian Journal of Science and Technology

DOI: 10.17485/IJST/v13i21.615

Year: 2020, Volume: 13, Issue: 21, Pages: 2104-2110

Original Article

Impact of mergers and acquisitions on shareholders' wealth: a study of Telecom sector of Pakistan

Salar Hussain^1,2∗, Imam-ud-Din Khoso¹, Fiza Qureshi ¹

1 Institute of Business Administration, University of Sindh, Jamshoro, Tel.: +923342145560
2 Shaheed Benzair Bhutto University, Shaheed Benazirabad, Shaheed Benazirabad

∗Corresponding author:
Salar Hussain
Institute of Business Administration, University of Sindh, Jamshoro,
Tel.: +923342145560
Shaheed Benzair Bhutto University, Shaheed Benazirabad, Shaheed Benazirabad
Email: [email protected]

Received Date:20 February 2020, Accepted Date:31 May 2020, Published Date:20 June 2020

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Objectives: This study aims to investigate the impact of mergers and acquisitions related events on the shareholders' wealth in Telecom sector of Pakistan. Statistical analysis: Event study methodology has been used to achieve this objective, in which, the short term and long term performance of firms are measured. For short term performance, Abnormal Returns (AR) and Cumulative Abnormal Returns (CAR) are measured while to determine long term performance, Buy-and-Hold Abnormal Returns (BHAR) are measured. Findings: The results revealed that the occurrence of these events has negatively affected the shareholders' wealth and the financial market did not respond to these events in the telecom sector of Pakistan. Application: The study suggests that the telecom sector should choose different strategies to gain market share, to increase revenues, to gain a competitive edge and to diversify risk.

Keywords: Mergers; acquisitions; event study; abnormal returns; cumulative abnormal returns; buy-and-hold abnormal returns

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Copyright

© 2020 Hussain, Khoso, Qureshi. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Published By Indian Society for Education and Environment (iSee)