Impact of Mergers and Acquisitions on the Corporate Performance in FMCG Sector of India

Bisma Afzal Shah*, Khursheed Ahmad Butt**
*Department of Management Studies, Central University of Kashmir, Jammu and Kashmir, India.
**Department of Commerce, Kashmir University, Jammu and Kashmir, India.
Periodicity:September - November'2019
DOI : https://doi.org/10.26634/jmgt.14.2.15418

Abstract

The aim of this work is to assess the impact mergers and acquisitions have on the value of listed firms in FMCG (Fast Moving Consumer Goods) sector in India. Mergers and acquisitions are a key component of a corporate growth strategy. They are common business tools used worldwide to increase their market share, enhance product offerings and/or diversify the product line, gain access to patents, R&D or technology, attain potential tax benefits, and ultimately maximize shareholder value. These constitute the primary goal of every business firm. The main objective of the present study is to assess the impact of merger and acquisition deals on the financial performance, operating performance, and shareholders' wealth of the sample firms by comparing their performance pre and post the deals. An empirical approach has been taken up to test the hypotheses that were formulated. The present study relies on non-primary sources of data. For all the firms, industry adjusted pre and post-merger/ acquisition ratios have been estimated. Means were also calculated. It is then followed by Paired sample t-test to see if there is any statistically significant difference between the averages pre and post the deals. The overall findings of the study depicted that the financial performance, operating performance, and wealth of the shareholders improved post-merger/acquisition, but the same were found to be statistically insignificant.

Keywords

Mergers and Acquisitions, Financial Ratios, Operating Performance, Financial Performance, Shareholders Wealth.

How to Cite this Article?

Shah, B. A., & Butt, K. A. (2019). Impact of Mergers and Acquisitions on the Corporate Performance in FMCG Sector of India. i-manager's Journal on Management, 14(2), 22-35. https://doi.org/10.26634/jmgt.14.2.15418

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