Impact of acquisition announcement on the valuation and decision of acquirers' in India - a conceptual framework

Abstract

The impact of acquisition announcement on the returns to acquiring firms around the announcement is a significant area of research as abnormal returns are considered to be the present value of future cash flows. This study conceptually analyses the valuation of acquirers, their decision to acquire and the consequences of acquirer decisions thereby developing a framework for analysing the acquirer performance using the pre-acquisition factors of acquirers such as financial, behavioural and deal parameters. Thus, this study provides a review of the various research developments in the area of valuation of acquirers and identifies the major research gap thereby providing a path for future researchers and industrialists but suggesting a new model for analysing the acquirer decisions using new parameters into the acquisition literature.