UNTANGLING THE EFFECTS OF MERGERS AND ACQUISITIONS ON CORPORATE PERFORMANCE IN INDIA'S FINANCIAL SECTOR

Abstract

This study examines the impact of mergers and acquisitions (M&A) on the post-merger performance of financial sector firms in India between 2005 and 2015. The authors evaluate the extent to which M&A transactions add value to the acquiring companies and analyze the various accounting indicators to measure corporate profitability. Financial data from Bloomberg, Prowess database, and stock exchanges NSE and BSE were used to conduct the analysis. A sample of 23 firms was selected, and a two-sample paired t-test was performed to compare pre- and post-M&A data. The authors also used principal component analysis to identify highly correlated variables. The results suggest that the impact of M&A on corporate performance is mixed, and it is challenging to generalize beyond the financial sector or to other emerging markets. The article contributes to the ongoing discussion on whether M&As generate or diminish value and provides a framework for evaluating M&A strategies