Comparing Pre and Post Merger Operating Performance: Case of Selected Top Indian Mergers

Abstract

In view of the growing internationalisation and liberalisation of the Indian economy, the corporate environment of the country has been passing through intense competition especially in the last two decades paving the way to survival of the fittest. In such a crucial juncture, even giants in the corporate arena keep hunting for strategies of stable growth along with the objective of ensuring sustainability. One of the most effective options in this context turns out to be M&As. In this landscape the present paper makes an attempt to examine the operating performance of the top mergers of India emerged in 2007. Considering 6 out of the 10 such top mergers the paper has compared the operating performance ratios of merging companies before and after merger. It has been found that except one company i.e. Tata Steel, in all the rest five companies, the operating performance measured in terms of operating profit margin, gross profit margin and net profit margin ratio has declined after merger.