Mergers and Acquisitions in India: A Strategic Impact Analysis for the Corporate Restructuring

In today's globalized economy, competitiveness and competitive advantages have become the buzzwords, for corporate around the world. Corporate restructuring has gained considerable importance all over the world because of intense competition, globalization and technological changes and in this context mergers and acquisitions (M&A) are being increasingly used the world over, for improving competitiveness of companies through gaining greater market share, broadening the portfolio to reduce business risk, for entering new markets and geographies, and capitalizing on economies of scale etc. Mergers are important corporate strategy actions that, among other things, aid the firm in external growth and provide it competitive advantage. This area has spawned a vast amount of literature over the past half a century, especially in the developed economies of the world. India too has been seeing a growth in the number of mergers over the past one-and-a-half decades since economic liberalization and financial reforms were introduced in 1991.

Therefore an attempt is made in this paper to evaluate the performance of merged banks based on comparing key financial position indicates before and after acquisition period of 5 years. This Research focuses on accounting ratios metric viz. profitability ratios to elicit financial position of the banks during pre and post acquisition periods. This will help to assess the implications of M&A on the financial position of acquisition bank in the deal. The methodology basically used is ratio analysis, statistical techniques etc. This study will significantly contribute to the knowledge, society and industry.