MERGERS AND ACQUISITIONS-THE GAME OF PROFIT AND LOSS: A STUDY OF INDIAN BANKING SECTOR

Abstract

Banking is one of the important sectors of Indian economy. The purpose of this paper is to examine the comparative position of pre & post-merger financial performance of selected banks. Present study highlights the major gaps in financial performance compared through Economic Value added. Using data drawn from money control and yahoo finance this present exploratory study covers a sample of six banks, which were got, merge during 2004 to 2010. Economic value added approach is used to compare pre and post-merger financial performance. The study revealed that post-merger financial performance has improved in major cases. Finally, evidence is presented that proper analysis before the merger deal can improve bank's performance. Because of the chosen research approach, the research results may not be generalizable for all banks. The paper includes implications for top management of banks in designing merger deal, which can be beneficial for them to have synergy gain in terms of financial, stock performance and wealth maximization.