Abstract
We study the value determinants of domestic acquisitions by firms from the BRICS countries and analyze whether these acquisitions create significant market values for acquirer and target shareholders. Target shareholders earn a significantly positive return of 1.45 percent on average upon announcement, acquiring firm shareholders lose slightly, by an average of 0.12 percent. Moreover, in the cross-section, the target’s returns are negatively related to firm size and pre-announcement returns, but are positively related to GDP growth. The cross-sectional market reaction of acquirer firms is weakly positively related to the firm’s leverage and again negatively related to pre-announcement returns.
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