In today's globalised economy, mergers and acquisitions (M&A) are being increasingly used the world over, for improving competitiveness of companies through gaining greater market share, broadening the portfolio to reduce business risk, for entering new markets and geographies and capitalizing on economies of scale etc. The Indian corporate sector has experienced a major restructuring through mergers and acquisitions, with the changes brought about by the Industrial Policy Resolution of June 1991. This research study was aimed to study the impact of mergers on the shareholder’s value creation, of acquiring Indian companies, by examining some pre- merger and post-merger performance of return on gross capital employed, return on net capital employed, return on share holder’s funds and earning per share. In order to evaluate this, tools like, ratio analysis, mean standard deviation and student paired “t” distribution test have been used. The results suggest that there is a mixed impact on shareholder’s value creation of acquiring companies.
Ransariya et al. (Wed,) studied this question.
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