*Associate Professor, Department of Commerce
**Ph.D. Research Scholar, Department of Commerce, Kanchi Mamunivar Centre for Post Graduate Studies, Pondicherry University, Puducherry – 605008, India
Online published on 7 August, 2012.
The present paper is attempted with the aim to study the operating performance of acquirer firms by use of operating performance measures (ratios) namely return on net worth, and return on capital employed, and t-test considering data for a period of three years before merger & acquisition (M&A) and after the M&A to compare the pre and post- merger operating performance of the acquirer firms thereby identify if there is a significant shift (increase) in the operating performance of the firms. The study covered a sample of 10 firms in each industry out of 118 firms listed in one of the leading Indian stock exchanges namely Bombay Stock Exchange, which have undergone M&A in the same industry (related merger) during the period 2004 to 2007. The study proves that the operating performance of Information Technology Industry, Real Estate & Infrastructure Management Industry, and Pharmaceuticals & Healthcare Industry is increased after the M&A, supported by t- test. However, it is not so in case of firms of Banking and Finance Industry, which is experienced a decrease in the operating performance after the M&A supported by t- test. Therefore, we conclude that the operating performance in terms of return on net worth, and return on capital employed is improved in case of Information Technology Industry, Real Estate & Infrastructure Management Industry, and Pharmaceuticals & Healthcare Industry after the M&A with the exception of Banking and Finance Industry in India.
Acquisition, Corporate restructuring, Merger, Merger & acquisition, Post-merger operating performance, Operating performance of Indian industries, Short-run operating performance
