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Impact of Merger and Acquisitions on Operating Performance: Evidence from Manufacturing Firms in India

Author

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  • Ramachandran Azhagaiah

    (Pondicherry University, India)

  • Thangavelu Sathishkumar

    (Pondicherry University, India)

Abstract

The present paper is carried out with the objective of studying what shift-in-structure is experienced especially in the operating performance (OP) after merger and acquisitions (M&AS) by studying 39 selected acquiring manufacturing firms in India. The firms, which had gone in to the M&AS process during the financial year 2006–2007 are only considered for the study. Factor analysis, correlation matrix, multiple regression, and chow test are applied to study the op of these firms in the pre-and post-merger periods. The study reveals that the M&AS process has significant (positive improvement) effect on op of the acquiring manufacturing firms in India after M&AS over the study period.

Suggested Citation

  • Ramachandran Azhagaiah & Thangavelu Sathishkumar, 2014. "Impact of Merger and Acquisitions on Operating Performance: Evidence from Manufacturing Firms in India," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 12(2 (Summer), pages 121-139.
    • Handle: RePEc:mgt:youmgt:v:12:y:2014:i:2:p:121-139
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    File URL: http://www.fm-kp.si/zalozba/ISSN/1581-6311/12_121-139.pdf
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    References listed on IDEAS

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    1. Drago Dubrovski, 2005. "Restructuring and Business Reengineering in Integrative Processes," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 3(1), pages 71-93.
    2. Levine, Paul & Aaronovitch, Sam, 1981. "The Financial Characteristics of Firms and Theories of Merger Activity," Journal of Industrial Economics, Wiley Blackwell, vol. 30(2), pages 149-172, December.
    3. Ikeda, Katsuhiko & Doi, Noriyuki, 1983. "The Performances of Merging Firms in Japanese Manufacturing Industry: 1964-75," Journal of Industrial Economics, Wiley Blackwell, vol. 31(3), pages 257-266, March.
    4. Healy, Paul M. & Palepu, Krishna G. & Ruback, Richard S., 1992. "Does corporate performance improve after mergers?," Journal of Financial Economics, Elsevier, vol. 31(2), pages 135-175, April.
    5. Raghavendra Rau, P. & Vermaelen, Theo, 1998. "Glamour, value and the post-acquisition performance of acquiring firms," Journal of Financial Economics, Elsevier, vol. 49(2), pages 223-253, August.
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    Citations

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    Cited by:

    1. Ahmed A.Elhakeem & Khairy Elgiziry, 2016. "The Impact of Acquisitions Deals Announcement According to Financing Decisions on Value of Listed Acquiring Companies at Egyptian Stock Exchange," Accounting and Finance Research, Sciedu Press, vol. 5(4), pages 115-115, November.
    2. SINDHU, A R & MADHAVAN, S. & Lab, SDAG, 2016. "A Study on the Growth Policies and Profitability of Select Mergers and Acquisitions in India," OSF Preprints ftacr, Center for Open Science.

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    More about this item

    Keywords

    acquisition; corporate restructuring; merger & acquisition; post-merger operating performance; operating performance of Indian industries; long-run operating performance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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