Assessing the Impact of Mergers and Acquisitions on Firm Performance: Evidence from India

The issue regarding why corporate enterprises engage in mergers and acquisitions (M&As) has become the centre of a large body of corporate finance literature in recent years. In the Indian context, the deregulated policy regime started in 1991 has significantly contributed to the increase in M&A activity. This paper is aimed at examining the long-term impact following M&As of listed Indian enterprises in the post-liberalisation period by using financial accounting data. Throughout the period of study, turnover increased after the companies experienced an M&A which is in line with the findings that Indian companies grew in size and attained bigger market share. M&As did not have any impact on return on net worth for the period of study. Mixed results have been reported for other variables.