Deals Involving Private and State-Owned Holdings Participation: Impact on Companies' Value

This study is devoted to the analysis of the impact of M & A transactions involving private and state holdings in Russia on the value of acquired companies. Using data on more than 80 mergers and acquisitions in Russia since 2004, in which state-owned holdings and business groups acted as buyers, we conduct an event analysis. We estimate the cumulative abnormal return of target companies, as well as the impact of the publicity of the buyer's company, obtaining control in the transaction process, the acquired share and the value of the deal. The results of the analysis showed a negative reaction of the market to the announcement of the transaction, where companies with state participation act as buyers. Transactions involving private holdings demonstrate less cumulative abnormal return than deals involving peer companies.