The Impact of Mergers and Acquisitions on Shareholders Wealth: Evidence from Pakistan

Abstract

2 Abstract: Mergers have been responsible for many important structural changes in different sectors. In fact mergers and acquisitions have substantially changed the environment in which organizations operate. During the last decade mergers and acquisitions (M&A) mania has hit almost every sector of life. This phenomenon was particularly true in USA and well developed Western countries. However, in Pakistan this activity is very negligible as compared to other countries of the world. Due to this lesser activity not a lot of work has been done in Pakistan in this area. This study investigated the performance record of forty five mergers and acquisitions (M&A) that took place during 2004 to 2010 in various sectors of Pakistan using event study methodology. Our findings indicated that overall during eleven day window period neither target nor acquirer firms created or destroyed value for shareholders.