The impact of mergers and acquisitions on corporate performance in India

Abstract

Purpose

While going for mergers and acquisitions (M&A) management smell financial synergy or/and operating synergy in different ways. But actually are they able to generate that potential synergy or not, is the important issue. The aim of this study is to find out whether the claims made by the corporate sector while going for M&As to generate synergy, are being achieved or not in Indian context.

Design/methodology/approach

This empirical study is based on secondary financial data and tabulation, ratio analysis, correlation etc. is being used for analysis.

Findings

The results indicate that in many cases of M&As, the acquiring firms were able to generate synergy in long run, that may be in the form of higher cash flow, more business, diversification, cost cuttings etc.

Research limitations/implications

The research shows that management cannot take it for granted that synergy can be generated and profits can be increased simply by going for mergers and acquisitions. A case study based research parallel to this study could be initiated to get nearer to reality show.

Originality/value

This study is an extension of M&A performance research, which has been conducted mostly in developed nations on their firms, to Indian firms by taking substantially large number of cases.

Citation

Kumar, S. and Bansal, L.K. (2008), "The impact of mergers and acquisitions on corporate performance in India", Management Decision, Vol. 46 No. 10, pp. 1531-1543. https://doi.org/10.1108/00251740810920029