Mubashar Tanveer, Ghulam Ali Bhatti, Fayyaz Aslam


The objective of this study is to examine the effect of merger announcements on the share prices of acquiring firms listed at The Karachi Stock Exchange. A sample of 13 merger announcements during year 2000 to 2012 is taken. Two types of merger announcements have been bracketed; one is proposed merger and the other is executed merger. In order to examine the effect of merger announcements on share prices, event study methodology is used. Market model is used to calculate abnormal returns. Moreover t-test is applied to test the significance of abnormal returns. On the basis of result, it is concluded that both types of merger announcement affect the share prices of acquiring firm. However, market reaction to these announcements is not immediate.


Merger, announcement, share pricing, event study

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