A Review on Prediction of Mergers and Acquisitions in the West: Statistical Considerations and Emerging Issues for Research in India

Abstract

The objective of this paper is to analyze the nature of research in the area of prediction of the targets of mergers and acquisitions (M&A). The paper analyzes the literature on prediction studies in the west over the past three decades and brings out certain statistical considerations which have to be given importance in future research studies. The study also analyzes various theories on M&A motives in the literature which can be used for successful prediction of targets. The paper then focuses on M&A in Indian scenario. After the post-liberalization era M&A has become an important tool of corporate restructuring in India. The increasing trend in M&A activity in India has captured the attention of researchers in India over the past decade. This study attempts to bring out the issues involved in implementing the models and theories of prediction studies from west in India. The study analyzes the prediction studies in India and explains that borrowing and implementing western models and theories in India may lead to biased results and thus points the need for developing new prediction models in India. This study also aims at giving ideas for future research in predicting takeover targets in India.