Mergers and Acquisitions and Corporate Performance: A Critical Review

The age of globalization has witnessed some major trends in the corporate scenario and one of the most promising strategies has been Mergers and Acquisitions (henceforth referred as M&A). The M&A has been taking a fundamental area of the corporate strategy and after the liberalization of 1991 has acquired a new dimension in the global economy. Major reasons of such M&A activity has been attributed to the enhancement of the market share, higher profitability and attainment of economies of scale. The functional importance of Mergers and Acquisitions has been undergoing a sea change since liberalization in India. Synergy is the reason for mergers. It implies a situation where the combined firm is more valuable than the sum of the individual firms combining. It refers to benefits other than those related to economies of scale. This paper is an explanatory attempt for examining the different studies that have been carried out in the field of M&A which is one of the most widely applied techniques of corporate restructuring. The study includes 40 papers by various researchers and the earliest study enumerated here dates back to 1983. The latest paper in the study is in 2010. Mainly the papers try to focus on the motives of the mergers and acquisitions.