Article : Measuring Post Merger Performance – A Study Of Metal Industry

Title

Measuring Post Merger Performance – A Study Of Metal Industry

Author

Sonia Sharma

In today’s globalised economy, mergers and acquisitions activity has gained importance caused by intensifying competition liberalization and globalization, integration of national and international markets. The aim of this paper is to study the impact of merger on the financial performance of merging companies by examining some pre- merger and post- merger financial ratios. The sample consists of 9 BSE listed companies of metal industry involved in mergers during the year 2009-10. Paired sample t-test is carried out to assess the difference in performance between post-merger and pre-merger periods. The findings showed a marginal but not significant improvement in case of liquidity and leverage but the profitability results showed significant decline in RONW and ROA which are contrary to our hypothesis. The results of this study suggest that in case of M&A, synergy can be generated in long run with the careful usage of the resources. The success of M&A deals depends on post integration process, timely action and to keep check on the costs of integration process.

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