... The Ahmedabad-based Zydus Cadila entered into an agreement to pick up 27.7 per cent stake in German Remedies Ltd (GRL) at a cost of Rs 148.6 crore on April 10, 2001. As per the deal Zydus, through its wholly-owned subsidiary, Recon Healthcare Ltd, picked up around 22.85 lakh equity shares in GRL held by Asta Medica AG and Heller Vermogensverwaltungs GmbH at a price of Rs 650 per share. Zydus also bought five brands for a sum of Rs52.55 crore from Asta Medica. The report tries to investigate the market's reaction to the deal and to explain the reaction by undertaking a fundamental analysis of the Target using DCF method. • The market's verdict on the deal is quantified in terms of abnormal returns i.e. returns over and above those expected from market variations. We find that the market passes out a negative verdict on the deal for both ...

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