A company may grow its business either by internal expansion or by
external expansion. In the case of internal expansion, the company
grows gradually over time in the normal course of the business, through
acquisition of new assets, replacement of the technologically obsolete
equipments and the establishment of new lines of products. But in
external expansion, a firm acquires a running business and grows
overnight through corporate combinations. These combinations are
in the form of mergers, acquisitions, amalgamations and takeovers
and have now become important features of corporate restrict.The
purpose of this study is to test the semi strong form of market efficiency
with respect to merger and acquisition announcements. The semistrong
efficient market hypotheses which test an investor’s ability to
earn a positive abnormal return on the basis of merger announcements
are examined. Specifically, this work focuses on the semi-strong form
test in an effort to test the efficiency of merger announcement public
information. Evidence here supports semi-strong market efficiency
along with a positive signal exhibited by the sample of acquiring firms
during the event period.

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