IMPACT ON SHAREHOLDERS WEALTH - AN ANALYSIS OF PUBLIC SECTOR BANK MERGERS IN INDIA

This paper studies the effect of forced Public sector bank mergers on the stock returns using event study methodology to determine abnormal returns around the merger announcement. The results show that in larger event window both the Anchor and the target bank group showed negative returns. However, on deal by deal basis no significant abnormal return were observed in daily return in most of the cases. The findings also show that during the event window other non-merged banks gave a positive abnormal return vis-à-vis the merger banks.