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International Journal of Economics and Finance
Vol. 2, No. 4; November 2010
Measuring Post Merger and Acquisition Performance: An Investigation of Select Financial Sector Organizations in India
Dr. Neena Sinha Associate Professor, University School of Management Studies Guru Gobind Singh Indraprastha University, Kashmere Gate, Delhi, India Tel: 91-98-1805-6810 E-mail: email@example.com Dr. K.P.Kaushik Professor, National Institute of Financial Management Sector-48, Pali Road, Faridabad-121001, India Tel: 91-93-1236-0874 E-mail: firstname.lastname@example.org
Ms. Timcy Chaudhary (Corresponding Author) Research Associate, University School of Management Studies Guru Gobind Singh Indraprastha University, Kashmere Gate, Delhi, India Tel: 91-98-1856-8903
The present paper examines the impact of mergers and acquisitions on the financial efficiency of the selected financial institutions in India. The analysis consists of two stages. Firstly, by using the ratio analysis approach, we calculate the change in the position of the companies during the period 2000-2008. Secondly, we examine changes in the efficiency of the companies during the pre and post merger periods by using nonparametric Wilcoxon signed rank test. While we found a significant change in the earnings of the shareholders, there is no significant change in liquidity position of the firms. The result of the study indicate that M&A cases in India show a significant correlation between financial performance and the M&A deal, in the long run, and the acquiring firms were able to generate value.
Keywords: Mergers and Acquisitions, Corporate Performance, India, Wilcoxon Signed Rank Test 1. Introduction
Strategic alliances and Mergers and Acquisitions (M&A) are the dominant corporate strategies followed by organizations looking for enhanced value creation. The growing tendency towards mergers and acquisitions (M&As) world-wide, has been driven by intensifying competition. There is a need to reduce costs, reach global size, take benefit of economies of scale, increase investment in technology for strategic gains, desire to expand business into new areas and improve shareholder value. During the first wave (i.e., 1990-95), the Indian corporate houses seem to have been bracing up to face foreign competition while the second wave (i.e., 1995-2000) experienced a large presence of multinational firms [Beena 2000]. The third wave of M&As in India (2000-till date) is evident of Indian companies venturing abroad and making acquisitions in developed and developing countries and gaining entry abroad. The relative size of target and acquiring firm has also increased. The size differences between the bidder and target firms influence acquisition performance and large acquisitions would have a greater combination potential [Kitching 1967]. M&As also determined, to a large extent, the nature of foreign investment in the country during this period. M&A comes in all shapes and sizes, and investors need to consider the complex issues involved in M&A. The most beneficial form of equity structure involves a complete analysis of the costs and benefits associated with the deals. Corporate restructuring including M&As have given rise to a host of important issues for business decisions, for public policy formulation and economic regulations. While business firms can grow both internally and externally, with increased global competition, it has become imperative for the business firms to grow inorganically that is externally. A look at the sectoral trends reflects that Indian financial sector is adopting inorganic strategies to grow its businesses. The Indian financial system comprises an impressive network of commercial banks (CBs),
India along with Japan and China is among the top five countries in the region with the highest number of M&A deals in the first three months of 2009. and scholars have proposed additional research into many issues. Indian Industries announced more billion dollar M&A deals in 2008 compared to the previous year when the markets were on a bull run. 2.and post merger financial ratios in India (Table A). The entry of foreign banks was restricted earlier.5 billion). and is India's 4th largest M&A deal to date. Even as the economic slowdown has impacted overall merger and acquisition (M&A) activity in Asia Pacific. Marking the largest-ever deal in the Indian pharmaceutical industry. there has been a sharp increase in the number of mergers and acquisitions in India. No. profitability and efficiency of merging companies. To enhance competition. Japanese drug firm Daiichi Sankyo in June 2008 acquired the majority stake of more than 50 per cent in domestic major Ranbaxy for over Rs 15. However. For the Indian financial sector organizations. But bulk of research has been in the context of U. In our paper. Insert Table A Here The above body of work has provided considerable knowledge on M&As concepts. HDFC bank's acquisition of Centurion Bank of Punjab was the lone large domestic M&A deal in 2008. in 2004.ccsenet. before and after merger and to assess its impact in terms of value creation for the merged or acquiring firms.www. It has been observed that they primarily cover nature of mergers in terms of their management. Section 2 discusses the present status of M&A in India. development finance institutions (DFIs) and non-banking financial companies (NBFCs).S and European industries. Extant Work and Hypothesis Development Extensive research is available in context to M&A. The Present status of M&A in India During the last decade. Published by Canadian Center of Science and Education 191 . Section 4 describes the data.al. The aim of this study is to find out the impact of mergers and acquisitions on corporate performance in Indian context particularly in relation to companies of financial sector. respectively. 3. there were however other large size transactions which kept the Indian -bankers busy. Section 5 discusses the impact of value creation for the merged or acquiring firms before and after merger. Researchers and economists have observed that due to smaller size. India is slowly but surely moving from a regime of 'large number of small banks' to 'small number of large banks' and ‘larger the bank. It is expected that in next decade (2010-2019). in terms of attractiveness for deals (Alaganandan et. Insert Table-1. but since 1991 a number of foreign banks have been allowed to operate in India. Figure-1 here M&A research has also peaked during the last decades and the research material on different aspects of M&As is extensive. post-merger operating performance of acquiring firms and comparison of pre. one of the strategies to face the intense competition could be. the total number of M&A deals announced in January 2009 stood at 18 with a total announced value of USD 970. the number of foreign and private banks operating in India increased from 21 and 23 in 1991 to 33 and 30. 2009). PricewaterhouseCoopers lists India amongst the top three emerging markets to watch out for over the next 18 months. Therefore. 4. foreign direct investment up to 74 per cent of ownership has been allowed in private banks and up to 20 per cent in nationalized banks. The rest of the paper is organized as follows. Section 6 concludes with avenues for future research.org/ijef International Journal of Economics and Finance Vol. The deal created the 15th biggest pharmaceutical company globally. Although involving the mega $10 billion plus deals of last year. the Indian commercial banks may find it very difficult to compete with international banks in various facets of banking and financial services in the post 2009 scenerio. India is among the top countries in the region in terms of M&A activity in the first quarter of 2009 even as deals saw a 72 percent decline from the same period a year ago. Tata Corus and Vodafone-Hutch were missing in 2008. higher its competitiveness and better prospects of survival’ appears to be the mantra for success. This study is an initial attempt to fill this void. global M&A deals by Indian industries is likely to more than treble and the domestic consumption oriented businesses like telecommunication and healthcare will throw up global scale Indian companies. operating and financial synergies. Section 3 elaborates the related literature.000 crore ($4. our paper attempts to fill the void by evaluating the financial performance of M&As particularly of financial sector companies in India . Consequently. to consolidate through the process of mergers and acquisitions. The largest M&A transactions involving an Indian company until now are depicted in Table 1. there is little published empirical literature on the impact of M&As in India. very little is known on how they have performed in financial-based industries. Despite the empirical evidence on M&A in general. According to global consultancy firm Grant Thornton. India has experienced upward trend in outbound deals (Figure 1). November 2010 co-operative banks (CPBs).66 billion in January 2008.85 million against 63 deals amounting to USD 1. we have reviewed literature covering motives of M&A and specifically the impact of M&A on financial viability of the companies. The banks have also been allowed to enter into insurance business either as joint venture participants or to take up strategic investment for providing infrastructure and services. 2.
4. 2002.debt to equity is calculated Overall efficiency parameters. The test statistic z is computed and probabilities observed are compared with desired level of significance (0. The financial data for these 17 companies is collected for six years i. Insert Figure A Here In all 491 (all industries) mergers took place during the event period. 2003 and years 1st April. The raw figures were obtained for the above said parameters and signed rank test is carried out to assess the difference in the performance between pre-merger and post-merger. Ha: There is a significant difference between the financial performance of the companies before and after the merger that is Ha: µ ≠ 0. Swaminathan. He found that profitability and efficiency of merging companies declined in the post takeover period.org/ijef International Journal of Economics and Finance Vol. financial viability and its ability to earn returns on shareholders' funds and capital employed. In order to evaluate the financial performance of the merging firms in the long run. No.XB=0. d. 2000 to 31st March. In our study XA denotes pre-merger and XB denotes post-merger. Surjit. Overall profitability parameters from Return to Equity Shareholders point of view. 2. The pre merger years taken for comparison are from 1st April. The sample under study includes 17 companies in financial sector (Table B). Sample Description This empirical study analyses the financial data of selected merging firms in the period 2000-2008. Empirical Results I. 2004 and 2005 are considered as the event years to identify the M&A deals in India and to compare the financial performance of the cases pre merger and post merger during 2000-2008. The combined returns of bidders and targets are positive. Drawing on the existing evidence we thus state our two hypotheses as: Ho: There is no significant difference between the financial performance of the companies before and after the merger that is Ho: µ = 0. Arora. Liquidity parameters. 2003. for three years pre merger and three years post merger period (average of three years) using Prowess database of Centre for Monitoring Indian Economy (CMIE).05) to accept or reject null hypothesis.profit before tax and profit before tax to total income Wilcoxon Signed Rank Test Methodology Insert Table B Here Wilcoxon Signed Rank Test is a non-parametric statistical hypothesis test for the case of two related samples on a single sample. 4. These are: a. it is pointed out that it is important to also study industries in context to India. b. 192 ISSN 1916-971X E-ISSN 1916-9728 . In this paper we find out the impact of mergers and acquisitions on corporate performance in Indian context particularly in relation to companies of financial sector. 2002. MVA and RONW. Swaminathan. c. return on net worth and earning per share are calculated. newspapers. In a recent survey article. Our study concentrated on the financial sector companies.e. 5. The results of the studies that focused on short-term returns suggest that target shareholders earn significantly positive abnormal returns and that bidders earn zero risk-adjusted returns.www. 2002 studied the sample of five companies and found that four of the five acquiring firms improved operating and financial synergies (measured through financial ratios). Data and Methodology a. CMIE database PROWESS.ccsenet. applying a set of eight financial ratios. b. 2008 are taken as post merger years (figure A). Arora. The data is collected from various sources. The Wilcoxon signed rank test compares the median of a single column of numbers against a hypothetical median. Studies by Surjit. The Wilcoxon signed rank test computes W± and the number of signed ranks is designated as ns/r that is equal to number of XA XB pairs (that is number of companies) minus the number of pairs for which XA. November 2010 At this juncture. Therefore. Overall profitability parameters (Return to Equity Shareholders) In the present study Return to Equity for shareholders is measured with the help of two ratios: Return on Net Worth and Earning Per Share. 2002 carried out an analysis of 20 merging firms to compare the pre and post takeover performance. magazines and journals. at least three years financial data is required. In order to test the hypothesis Wilcoxon Signed Rank Test is used for four parameters. Bruner (2002) summarizes the findings of 130 studies conducted during 1971-2001. 2003 have guided the methodology employed in the paper. 2005 to 31st March.current ratio is measured Solvency parameters . The use of both these ratios presents a broad picture of a company's efficiency. 2003 examined the post merger performance of merged companies using the value added metrics of corporate performance such as EVA.
showed an increase in EPS during post merger period but it was observed that inspite of increase in amount of EPS the value was still negative. 2. 15 merging firms indicate increase in EPS and only 2 merging firms showed decrease in average of three year of EPS during post merger period when comparing with pre merger performance of same cases.). Hence.05 (2-tail test) and 0.ccsenet. Major observations in Table 2 Out of 17 merger cases of financial sector. It measures the company’s efficiency of using the capital (shareholders funds) entrusted to it and generating profits. In the next step. Major observations in Table 4 The results of the current ratio of sample merging firms before and after merger have been presented in Table 4.001).64 at significance level of 5% and the difference is statistically significant at two tail test (p value=0.www. for financial sector companies we accept the null hypothesis and observed the difference between pre and post merger RONW to be not statistically significant. 11 merging firms showed a positive sign. Among the sample.3125 and p value (1-tail)=0.64 at 5% level of significance and difference between pre and post merger current ratio position is not statistically significant as inferred by p value (2-tail)=0. 4. Liquidity parameters Liquidity ratios measure the short term solvency i. On the contrary. is not a good sign. 2 merging firms having negative value. Among the 17 merging cases. Insert Table-2 here Earning Per Share (EPS) In order to get true idea of return on investment owner should evaluate his investment returns not on the basis of the dividend received. The more the EPS better are the performance and prospects of the company. Current Ratio In a sound business. A very high ratio will result in idleness of funds and therefore.1562.002) and one tail test (p value=0. but on the basis of the EPS i. 7 merging firms showed increase in current ratio and 10 merging firms showed decrease in current ratio. which increased relatively with greater speed than current liabilities. the firm’s ability to pay off current dues. By running Wilcoxon test null hypothesis is proved for financial sector companies as z=1.org/ijef International Journal of Economics and Finance Vol. The average amount of net worth of financial sector (Table 2) companies after merger was higher than that of pre merger period. In the present study current ratio is used to check the liquidity of the firm. In the case of Laxminarayan Investment Ltd.2937>0. it can be interpreted that the firm may have idle funds available as current assets. increase in RONW and 6 merging firms showed decline in net worth.64) with p value 0. we find that there is a significant correlation between financial performance and the M&A deal. we perform non-parametric (Wilcoxon) test to verify whether there is difference between the pre and post merger efficiencies.09>1. The result seems to be consistent with our null hypothesis at 5% level of significance (z = 1. a low ratio would mean inadequacy of working capital.01<1. No.1469>0. Insert Table-4 here Published by Canadian Center of Science and Education 193 .05 (1-tail test). Insert Table-3 here II. EPS of 9 firms increased more than fifty per cent during post merger period as compared to pre merger performance of the companies. Therefore. current ratio increased from 1 times to 10 times (approx. showing a huge increase in working capital. earnings per share.e. i. Also out of 17 merging cases. 3 merging firms showed negative net worth during post merger period.e.05<1.e. Major observations in Table 3 The EPS of merged company during pre and post merger periods given in Table 3 can be interpretated as: It is interesting to note that among the sample of 17 merging cases. a current ratio of 2:1 is considered an ideal one. November 2010 Return on Net Worth (RONW) RONW measures the rate of return on the shareholders equity of the owners. We also find that the null hypothesis is rejected as z=3.
we found the change in the return on net worth. Overall. Major observations in Table 5 Out of 17 merging firms. It can be interpretated as good sign for the companies going for merger. On the other hand the results of PBT to total income were found to be consistent with the null hypothesis at z = 1. 11 firms showed increase in PBT to total income and 6 firms showed decline in ratio. there was increase in debt to equity ratio of 11 merging firms. Major observations in Table 7 It was observed that out of 17 merging cases in financial sector.0003 (2-tail). Overall efficiency parameters The main objective of business is to earn profit. Debt-Equity ratio The debt to equity ratio is worked out to ascertain soundness of the long term financial policies of the firm.0764 (1-tail) and 0. The difference is statistically significant as p value = 0. Table 6 depicts PBT of the merging cases in financial sector and can be interpreted as follows: Major observations in Table 6 It is interesting to know that all 17 merging cases taken under study have shown increase in the profit before taxes. Insert Table-6 here Profit before tax to Total income Profit before tax (PBT) to total income is the relationship between profit before tax and total income incurred by the business.ccsenet. 5 companies had negative profits before taxes during pre merger period but it is observed that during post merger period the average of three years profit before taxes was positive.org/ijef International Journal of Economics and Finance Vol. In this study debt-equity ratio is used to measure the solvency position. It is important to note that the average increase in the value of 4 firms over three year was small. A higher ratio indicates a risky financial position while a lower ratio indicates safer financial position. the results for PBT were found to be inconsistent with the null hypotheses and we reject the same as z = 3.43 at 5% significance level and p value = 0. 2. 194 ISSN 1916-971X E-ISSN 1916-9728 . which means that debt (leverage) in the firm increased. liquidity position and profit before tax to total income of the companies to be not statistically significant. Therefore.www. efficiency in business is measured by profitability. Profit before tax (PBT) Profit before tax. Solvency parameters Solvency parameters indicate the ability of an enterprise to meet its long term indebtedness (obligations). November 2010 III.0002 (1-tail) and 0. measures the profits of the companies before paying corporate taxes. When we perform non-parametric Wilcoxon signed rank test. The debt to equity ratio of sample merged companies during pre and post merger period of financial sector is exhibited in Table 5. First. a measure of profitability is the overall measure of efficiency. 2 firms out of 17 merging cases showed decline in debt to equity ratio. Second. 4. To check the overall efficiency of the merging cases. Insert Table-7 here 6. As per the results from the Wilcoxon test we reject the null hypothesis for financial sector companies with z=2.64 at 5% level of significance. profit before tax. contrary to our expectations.0069 (1-tail test) and p value = 0. earning available to shareholders and debt to equity ratio showed a significant change in pre and post merger financial position of the companies. Conclusion With the series of M&A taking place in financial sector in India more than half of the merging firms showed improved financial performance in the post merger time period as compared to the pre merger period. the result of the study indicate that in most of the M&A cases. Insert Table-5 here IV. profit after tax and profit before tax to total income are calculated.0139 (2-tail test).1527 (2-tail). or PBT.61 at 5% significance level and p value =0.46>1. Our study produced several interesting findings. Among these 17 merging cases. The results of PBT to total income of sample merging firms before and after merger of financial sector companies have been presented in Table 7. No. Thus.
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Indian management. 2006 p. Total Name of sector Banking Financial institutes Non banking financial companies Sample merged companies 10 2 5 17 (Source: Prowess database of CMIE) 196 ISSN 1916-971X E-ISSN 1916-9728 . Track in M&A. (2007). “India Inc’s cross-border M&A deal value goes up 16 times: study”.www. 1997 Central objective/finding Examined the prospect of increasing profitability and market share by acquisitions Used shareholder value to guide investments Argued that mergers create synergies. (1995). 1988) . PhD thesis abstract. 1995. 2002. pp. “M&A activities in 2008 dips: Grant Thornton”. The Economic Times.S. May 19.financialexpress. “A study of corporate takeovers in India”. P. 2009 Angwin. 1. Sufian . and Habibullah.php/ijef/article/viewFile/3409/3091.indiatimes.: Billion dollar deals spike up. 2002.2008. Sufian and Habibullah. Kaur.14.in/tags/business/2007/08/16/indian-mergers-acquisitions-changing-indian-business/ accessed on Thu Jan 1. List of financial sector companies merged between 1st April. “Successful Mergers and Acquisitions”.cms. 2005 S. http://trak. (2002). L. 1993. (2009). no. Arora. (2002). S. Vol. Beena. Rappaport 1981. 2007. Prentice-Hall. al.com/news/india-incs-crossborder-m&a-deal-value-goes-up-16-times-study/140393/. Wong and Cheung. (2008). 3. “The Effects of Merger and Acquisition Announcements on the Security Prices of Bidding Firms and Target Firms in Asia”. Mantravadi and Reddy. Wullaerts. & Cheung. F. 1993. Agarwal. 2002.ccsenet. http://www. (2009). (2002). 2002. 3 (8). 2009 The Financial Express (2007). D. 2. London. 2009 Haspeslagh and Jemison. Bradley. International Journal of Economics and Finance.2 http://journal. 2000. retrieved on January 25.. The Economic times (2008). 2. Selected studies on M&A Issues under consideration PROFITABILITY AND MARKET SHARE SHAREHOLDERS VALUE CREATION SYNERGIES Contributors Cartwright & Cooper.ccsenet. NY. The Free Press. “Successfully Managing International Mergers and Acquisitions: A Descriptive Framework” International Business: Research Teaching and Practice Sirower.org/index. Table A. Child. 2003 and 31st March. 340-349. 2009 12:17pm IST Wullaerts. 2005. 4. submitted to University of Delhi. M. pp 1-11. Kui Yin. Bhaumik and Selarka . 2003. Sirower. “The Essence of Mergers and Acquisitions”. “Do mergers and acquisitions leads to a higher technical and scale efficiency? A counter evidence from Malaysia”. Vol.org/AJBM Surjit.academicjournals. Swaminathan. pp 72-77. Shah. No. http://economictimes. African Journal of Business Management.1 No. Surjit. 1992. retrieved on January 25. et. Sudarsanam. November 2010 Rottig. “Indian Mergers and Acquisitions: The changing face of Indian Business”. Wong. Larsson. New York.org/ijef International Journal of Economics and Finance Vol. Swaminathan. “Indian M&As:why they have worked so far”. Synergies actually achieved are just not sufficient to justify the premiums paid Organizational Cultures and management styles has become a common panacea yet little is known about learning through international acquisitions Studied the financial and operating performance of the companies Table B. 1998. (1997). Chatterjee et al. 2009.com/Markets/Analysis/MA_activities_in_2008_dips_Grant_Thornton/articleshow/3 885087. 1991. 2001. Chakrabarti. “The Synergy Trap: How Companies Lose the Acquisition Game”. M. Anson. Sudarsanam. strategic CULTURE AND CROSS-BORDER MERGERS ASSESSMENT OF FINANCIAL ASPECT (Source: compiled by authors) Cartwright and Cooper 1991. Desai and Kim (1983. http://www.
9867 P(2-tail) 0.4 billion $2. Top Transactions made by Indian companies as on May 29. Figures in percentage XB 11.No Company Name XA 1 Bank Of Baroda 13. Punjab National Bank Sundaram Finance Ltd.9967 15 Union Bank Of India 15.6633 -1.9967 17 Walchand Peoplefirst Ltd. Ltd.7867 28.6667 7.8700 10.001 Published by Canadian Center of Science and Education 197 .0967 25.6733 14 Tulip Star Hotels Ltd. -4.1033 -2.3367 4 Eicher Ltd.4933 15.1 billion $6 billion $4.0500 32.org/ijef International Journal of Economics and Finance Vol.rediff.6900 7 Infrastructure Development Finance Co.9733 0.9000 20.0933 13 Sundaram Finance Ltd.3767 19. 11.5233 -3. D=Decrease. I D B I Bank Ltd.1000 -13.6967 13.5500 0. 2.1500 W=-45 ns/r=17 P(1-tail) Z=|-1.6133 12 Punjab National Bank 19. November 2010 Table 1. -2.9433 10. 10.2333 43.7 billion $2. L & T Finance Ltd.1200 31.5533 -0. Oriental Bank Of Commerce Pioneer Investcorp Ltd. -6. Union Bank Of India Vijaya Bank Walchand Peoplefirst Ltd.2 billion $11.3633 18.6767 3. Infrastructure Development Finance Co. No.8 billion $2.3900 -1.5133 6 Indusind Bank Ltd.0667 24.1469 Source: Computed from Prowess Note: 1.4133 16. -4.3 billion $1.com/slide-show/2009/may/29/slide-show-1-indias-11-largest-m-and-a-deals.3033 14.8733 2 Bank Of India 18.6367 19.www. Tulip Star Hotels Ltd. 6. I=Increase 7.6167 10 Oriental Bank Of Commerce 19.7100 53. Indusind Bank Ltd. 3. 2009 Acquirer Tata Steel Vodafone Hindalco Ranbaxy ONGC NTT DoCoMo HDFC Bank Tata Motors Suzlon Target Company Corus Group plc Hutchison Essar Novelis Daiichi Sankyo Imperial Energy Tata Teleservices Centurion Bank of Punjab Jaguar Land Rover RePower Deal value $12.5900 24.05|=1.1900 5.7233 5.2937 Table 3.09|=3.2400 3 Corporation Bank 18.1567 50.4467 11 Pioneer Investcorp Ltd.8367 4.0200 15. 4.2367 8. 1 2 3 4 5 6 7 Company Name Bank Of Baroda Bank Of India Corporation Bank Eicher Ltd. Return on Net Worth (RONW) S. Laxminarayan Investment Ltd.5 billion $2.8667 9 Laxminarayan Investment Ltd.6167 8 L & T Finance Ltd.8400 1. -17.6333 3.6233 8.6967 5 I D B I Bank Ltd.05 0. Ltd.7 billion Industry Steel Telecom Steel Pharmaceutical Oil and Natural Gas Telecom Financial Institution Automobile Power (Source: http://business.9267 41.7200 19.3833 8. XA 17.2100 Change in EPS I I I I D D I S/R of׀XA -XB׀ -11 -12 -15 -16 +7 +4 -5 8 9 10 11 12 13 14 15 16 17 W=-131 ns/r=17 Z=|-3.09 Source: Computed from Prowess 0. Earnings Per Share (EPS) S.6533 XB 30.002 I I I I I I I I I I -8 -2 -14 -13 -17 -9 -1 -10 -3 -6 P(1-tail) 0.ccsenet.5133 -1.9300 -6.2300 39. 4.No.1467 1.8533 16 Vijaya Bank 19.htm#contentTop) Table 2.5700 12.7700 1.9100 Change in RONW D I D I I D I I I D I D I I I D I S/R of׀XA -XB׀ +4 -2 +9 -16 -1 +13 -8 -14 -3 +11 -17 +7 -12 -15 -6 +10 -5 P(2-tail) 0.8567 12.
5 I D B I Bank Ltd.1667 3.7500 0.5967 1.7867 0.9133 0. Infrastructure Development Finance Co.9833 1.4767 1. . 6 Indusind Bank Ltd.1000 4. Ltd. I=Increase 2.1767 3.1767 5.2000 2.No.6933 3.6833 0.3125 Source: Computed from Prowess Note: 1.6333 1. 4.9100 2.9200 0. 15 Union Bank Of India 16 Vijaya Bank 17 Walchand Peoplefirst Ltd.9733 3.6000 0.1533 2. 7 Infrastructure Development Finance Co.01 Company Name Bank Of Baroda Bank Of India Corporation Bank Eicher Ltd.0067 Change in Debt equity ratio I D I I I I I I I I D I I S/R of׀XA -XB׀ -5 +1 -7 -3 -8 -13 -10 -2 -6 -12 +9 -11 -4 - P(2-tail) 0.org/ijef International Journal of Economics and Finance Vol.1667 XB 4. Laxminarayan Investment Ltd.9600 0.0533 0. Indusind Bank Ltd. Current Ratio S.6567 0. 2.ccsenet.46 0.1562 P(2-tail) 0.7900 0. XA 3.5700 1. 14 Tulip Star Hotels Ltd. Punjab National Bank Sundaram Finance Ltd.4533 0.5900 1.0069 Source: Computed from Prowess Note: 1.1800 3.2933 2.No.5900 0. D=Decrease. Union Bank Of India Vijaya Bank Walchand Peoplefirst Ltd.5067 0.0967 1.2333 5. D=Decrease.6433 1.9733 0.7333 1.1333 1.= data not available XA 0. I=Increase 2.0933 0.6233 0.8633 5. 9 Laxminarayan Investment Ltd.www. November 2010 Note: 1.0139 2.8100 2. Figures in Times Table 5. Tulip Star Hotels Ltd.5100 10.8667 0. L & T Finance Ltd.4333 2. Ltd.8900 XB 0. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 W=43 ns/r=17 Z=1.3567 1. I=Increase. W=-71 ns/r=13 P(1-tail) Z=|-2.2567 3. Figures in Rupees Table 4.3133 5.1800 7.0467 3. 12 Punjab National Bank 13 Sundaram Finance Ltd.4233 1. D=Decrease.7167 7.5867 2. I D B I Bank Ltd.6100 4. Oriental Bank Of Commerce Pioneer Investcorp Ltd.9700 Change in Current Ratio I I I D I D D D I D D I D D D I D S/R of׀XA -XB׀ -6 -10 -1 +5 -9 +3 +13 +15 -17 +14 +16 -8 +7 +11 +12 -4 +2 P(1-tail) 0.5033 4.5567 2.6700 2. Company Name 1 Bank Of Baroda 2 Bank Of India 3 Corporation Bank 4 Eicher Ltd.46|=2.0333 1. 10 Oriental Bank Of Commerce 11 Pioneer Investcorp Ltd.5233 2. 8 L & T Finance Ltd.4933 2.9900 3. Debt-Equity Ratio S.4100 0. No. Figures in Times 198 ISSN 1916-971X E-ISSN 1916-9728 .
9133 70.9967 0.1967 135. I D B I Bank Ltd. 4. Infrastructure Development Finance Co.61|=3. Profit Before Tax (PBT) S. I=Increase 2.6633 7.No.9233 P(1-tail) 0.7667 20.9500 1378.0300 12.5300 2. Company Name XA XB Change in PBT/Total income I S/R of׀XA -XB׀ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Bank Of Baroda Bank Of India Corporation Bank Eicher Ltd.6700 766. D=Decrease.6500 -1.8433 47. L & T Finance Ltd.4700 -0.5667 2499.61 Source: Computed from Prowess Note: 1. Indusind Bank Ltd.4167 10.4533 27.3833 44. Ltd.0033 14.4833 19.4300 187. 2.7300 20.8033 1. 11. No.5600 15. I D B I Bank Ltd. November 2010 Table 6.0767 10. Union Bank Of India Vijaya Bank Walchand Peoplefirst Ltd.9633 8.1133 7.3767 9.6167 55. W=-61 ns/r=17 Z=|-1.9367 -4.org/ijef International Journal of Economics and Finance Vol. D=Decrease. Ltd. PBT/Total income S.8567 I I I I I I I I I I I I I I I I I P(2-tail) 0.www. Figures in Rupees in Crores Table 7. Tulip Star Hotels Ltd.ccsenet. Laxminarayan Investment Ltd. Oriental Bank Of Commerce Pioneer Investcorp Ltd. Infrastructure Development Finance Co.2233 20. I=Increase 2.5767 15.4733 292. Figures in Times Published by Canadian Center of Science and Education 199 .4367 10.6733 3.6700 1711.43|=1.7133 -34. 808. Tulip Star Hotels Ltd.0764 14.1467 27.8667 14.1267 5.2267 93.1133 506.4833 -24.3533 8. L & T Finance Ltd.8533 93.0800 70.0300 85.8067 0.3167 P(1-tail) 0. Oriental Bank Of Commerce Pioneer Investcorp Ltd.9867 711.5833 -663. Punjab National Bank Sundaram Finance Ltd. Company Name XA XB Change in PBT S/R of׀XA -XB׀ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 W=-153 ns/r=17 Bank Of Baroda Bank Of India Corporation Bank Eicher Ltd.8700 72.9200 840.0002 1658.43 Source: Computed from Prowess Note: 1. Punjab National Bank Sundaram Finance Ltd.0767 852.1200 18.8167 -0.2867 621.5833 -285.1600 494.6433 722.1527 15 Union Bank Of India 16 Vijaya Bank 17 Walchand Peoplefirst Ltd.0600 37.9567 218.8200 -3. Indusind Bank Ltd.6900 528.4700 -125.8100 -5 -6 +1 -14 -11 +4 +9 -13 +12 +3 -15 -8 -10 +17 -7 -2 -16 I D I I D D I D D I I I D I I I P(2-tail) 0.1667 10.0003 -13 -15 -11 -6 -16 -4 -12 -7 -1 -10 -5 -17 -8 -3 -14 -9 -2 Z=|-3. Laxminarayan Investment Ltd.8000 4.No.
November 2010 Pre merger 2000 period 2003 Event Years taken in study 2005 Post merger period 2008 Figure A.ccsenet. Indian outbound deals since 2000 200 ISSN 1916-971X E-ISSN 1916-9728 . Period taken in study (Source:http://trak. 2. No.org/ijef International Journal of Economics and Finance Vol. 4.www.in/tags/business/2007/08/16/indian-mergers-acquisitions-changing-indian-business/) Figure 1.
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