Adarsh Journal of Management Research

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Effect of Mergers and Acquisitions on Financial Performance of Firms Across Different Sectors in India


Affiliations
1 Assistant Professor, Management Studies, Central University of Kashmir, India
2 Professor, Dept of Commerce, University of Kashmir, India
 

Mergers and acquisitions are an integral and big part of corporate finance world. Mergers and acquisitions play a vital role in corporate finance by enabling firms achieve varied objectives and financial strategies. The objective of the study is to examine the impact of mergers and acquisitions on the financial performance of the various companies that have undergone merger or an acquisition across different sectors in India. The aim of the present study is to investigate whether there is any significant difference in the performance of the firms pre-merger/acquisition and postmerger/ acquisition periods. Financial ratio analysis has been used to calculate change in the financial position of the companies during the period 2004-2009 has been calculated. The data has been collected from Centre for Monitoring Indian Economy. A paired sample t-test is adopted to check for any statistically significant difference between the means pre and post the deals. Besides, a regression analysis has been done to test the relationship between the dependent variable and the independent variable.The results revealed that M&A’swere not able to create significant changes in financial performancefor the individual firms. Majority of the changes in the financial ratios was found to be positive but the change was not found to be statistically significant.

Keywords

Mergers and Acquisitions, Financial Performance, Financial Ratio Analysis.
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  • Effect of Mergers and Acquisitions on Financial Performance of Firms Across Different Sectors in India

Abstract Views: 495  |  PDF Views: 187

Authors

Bisma Afzal Shah
Assistant Professor, Management Studies, Central University of Kashmir, India
Khursheed Ahmad Butt
Professor, Dept of Commerce, University of Kashmir, India

Abstract


Mergers and acquisitions are an integral and big part of corporate finance world. Mergers and acquisitions play a vital role in corporate finance by enabling firms achieve varied objectives and financial strategies. The objective of the study is to examine the impact of mergers and acquisitions on the financial performance of the various companies that have undergone merger or an acquisition across different sectors in India. The aim of the present study is to investigate whether there is any significant difference in the performance of the firms pre-merger/acquisition and postmerger/ acquisition periods. Financial ratio analysis has been used to calculate change in the financial position of the companies during the period 2004-2009 has been calculated. The data has been collected from Centre for Monitoring Indian Economy. A paired sample t-test is adopted to check for any statistically significant difference between the means pre and post the deals. Besides, a regression analysis has been done to test the relationship between the dependent variable and the independent variable.The results revealed that M&A’swere not able to create significant changes in financial performancefor the individual firms. Majority of the changes in the financial ratios was found to be positive but the change was not found to be statistically significant.

Keywords


Mergers and Acquisitions, Financial Performance, Financial Ratio Analysis.

References





DOI: https://doi.org/10.21095/ajmr%2F2020%2Fv12%2Fi1%2F144254