DIVESTITURE POST MERGERS AND ACQUISITIONS IN INDIA – REASONS AND MODEL TO PREDICT

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dc.contributor.authorSingh, Aditya Pratap
dc.contributor.authorSingh, Archana
dc.contributor.authorMaheshwari, Girish Chandra
dc.date.accessioned2026-01-14T12:00:20Z
dc.date.available2026-01-14T12:00:20Z
dc.date.issued2025-06-30
dc.description.abstractDivestitures post-acquisition are a common occurrence yet the jury is still out on whether they represent correction of prior mistakes or are a restructuring tool to improve performance in the hands of managers evaluating overall portfolio of assets. We take a sample of 1,344 deals buy Indian public listed buyers from 2000 to 2020 of which 13% were followed by a divestiture to create models to predict if an acquisition is likely to be followed by a divestiture or not using logistic regression and discriminant analysis. Our model is more than 75% accurate in its prediction even when tested on unselected data (new data for the model). We find support for portfolio theory and reject the correction of prior mistakes theory to explain post-acquisition divestitures. We support the theory that financial constraints leads to post acquisition divestiture. We also support the theory on indigestion that post acquisition divestitures are due to cookie-jar problem where buyers are finding it difficult to integrate. Increased volatility and poor mean stock price returns both contribute to conditions leading to such divestitures. The model constructed is useful for shareholders and other stakeholders to predict whether a divestiture will follow an acquisition or not. Managers can also use the model to predict eventual outcome of their acquisition decisions.en
dc.formatapplication/pdf
dc.identifier.citationApplied Studies in Agribusiness and Commerce, Vol. 19 No. 1 (2025): APSTRACT ,
dc.identifier.doihttps://doi.org/10.19041/APSTRACT/2025/1/6
dc.identifier.eissn1789-7874
dc.identifier.issn1789-221X
dc.identifier.issue1
dc.identifier.jatitleAPSTRACT
dc.identifier.jtitleApplied Studies in Agribusiness and Commerce
dc.identifier.urihttps://hdl.handle.net/2437/402112
dc.identifier.volume19
dc.languageen
dc.relationhttps://ojs.lib.unideb.hu/apstract/article/view/15504
dc.rights.accessOpen Access
dc.rights.ownerAditya Pratap Singh, Dr. Archana Singh, Prof. G C Maheshwari
dc.subjectmerger and acquisitionen
dc.subjectpredicting divestitureen
dc.subjectacquisition failureen
dc.subjectrestructuringen
dc.subjectdivestitureen
dc.titleDIVESTITURE POST MERGERS AND ACQUISITIONS IN INDIA – REASONS AND MODEL TO PREDICTen
dc.typefolyóiratcikkhu
dc.typearticleen
dc.type.detailedidegen nyelvű folyóiratközlemény hazai lapbanhu
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