Abstract
“Mergers and Acquisitions- Changing Paradigm
of Indian Corporate”
The
Indian economy has undergone a major transformation and structural change
during the past decade or so as a result of economic reforms introduced by the
Government of India since 1991 in the wake of policy of economic liberalization
and globalization. In this liberalized era, size and “core competence” have
become the focus of every business enterprise. Naturally, this requires
companies to grow and expand in businesses that they understand well. Thus,
leading corporate houses have undertaken a massive restructuring exercise to
create a formidable presence in their core areas of interest. Mergers and
acquisitions (M&As) is one of the most effective methods of corporate
restructuring and has, therefore, become an integral part of the long-term
business strategy of corporate. The M&A activity has its impact on various
diverse groups such as corporate management, shareholders and investors,
investment bankers, regulators, stock markets, customers, government and
taxation authorities, and society at large. Therefore, it is not surprising
that it has received considerable attention at the hands of researchers world
over. But M&A is an area of potential good as well as potential harm in
corporate strategy. It is necessary that an analysis has to be made to compare
the financial performances of the acquiring companies before and after the
merger, by using the tools of ratio analysis. This research paper is an attempt
to examine the above in order to find out whether at all the acquisition
creates positive values for acquiring companies.
