Financial Performance of Firms Pre- and Post-M&A: A Study of Selected Indian Acquirers

Abstract

The objective of the study is to analyse and compare the pre- and post-acquisitions financial performance of 50 Indian acquirers. The selected acquirers are publicly listed companies. The study has used the secondary data obtained from the financial statements. The M&A for acquiring firms become questionable if the financial performance of the acquirers does not improve in the long run. This research study analyses the financial performance of M&A deals in respect of the publicly listed Indian acquirers using accounting ratios at three different levels: all deals, manufacturing industry and service industry. The deals taken for this study constitute 85% of the value of the M&A market for the period chosen between 2010 to 2014. The financial analysis has been compared for three years pre-and-post the deal. The data has been obtained from companies’ annual reports and online databases available in the public domain. The study leads to the conclusion that the acquirers failed to gain financially even after three years of the deal.