Impact of M&A On Indian Companies

In today’s globalised economy, mergers and acquisitions (M&A) are being increasingly used the world over [7], for improving competitiveness of companies through gaining greater market share, broadening the portfolio to reduce business risk, for entering new markets and geographies, and capitalising on economies of scale etc. Indian companies have significantly increased their M&A activity over recent years, particularly in terms of cross-border acquisitions with a CAGR of 28% over the period 2000-2007 of which over-seas M&A accounting for $22.6 billion[6]. Hence it becomes an imperative study to the performance of these companies pre and post acquisition to identify whether they have actually profited from the deal or not. Also, most of the acquisitions were done during the economic boom in 2006-07. This study thus aims at finding whether these firms have gained a significant advantage over their competitors in terms of tackling the economic slowdown or if the Indian firms have acquired a huge liability on their books.