Financial Performance of Companies Across Different Sectors Pre and Post Merger

Abstract

The main motive for companies to go for mergers and acquisition is to grow their business but there are other reasons as well like, to diversify the business, reducing the cost of operation, increased revenue generation, in order to have an expertise in some specialized field and above all to achieve tax benefits. There are basically four different types of mergers namely, vertical (companies in same business but different supply stage), horizontal (merger of companies in same business), conglomerate (merger involving firms in totally unrelated business) and congeneric (though in same business but produce differentiated products). An M&A can be a friendly one and also be a hostile one. A friendly takeover will have the target company being agreed for the merger while in a hostile takeover there is a strong resistance from the target company. They use various tactics like shark repellants, golden parachutes, greenmail, shark repellants, poison pill just to avoid getting merged with the acquirer firm. This generally happens because the target company doesn’t want to lose its individual existence. In this research we will discuss about some very famous M&A that happened in India in past decade from 2013-2023.