Mergers and Acquisitions: A Key Revival Strategy During the COVID-19 Times

The COVID-19 pandemic has shuttered regional and national economies for weeks and months at a time. In fact, the rapidly increasing threat around the COVID-19 virus has created a negative influence on the business as well as the investor community across the world. More specifically in India, the subsequent lockdowns had drastically negative effects on the economy, mainly on the Aggregate Demand, which is the biggest source of GDP. In this optic, the present study constitutes an attempt to show how M&As might be one of the revival strategies in the banking sector. To do so, two examples of mergers were cited: between troubled Lakshmi Vilas Bank (LVB) and DBS Bank India Ltd on the one hand, and between Indian Bank and Allahabad Bank on the other hand. Accordingly, the objectives of the present research consist of analyzing the troubled Lakshmi Vilas Bank (LVB) where the COVID-19 outbreak is causing serious concern through different financial ratios; then comparing between Post- and Pre-Merger Financial health of Indian Bank. A financial analysis was undertaken for both of the banks, separately by ratio analysis. The main results of the chapter show that the merger with DBS enhances the financial picture of LVB. Besides, the financial position of the Indian Bank has been improved during the post-merger period compared with the pre-merger one. It implies then that mergers can be opted as a key revival strategy to combat the financial crisis caused by coronavirus. Some other Business Survival Strategies could also be recommended to strengthen the Indian Economy.