The Performance Analysis of Companies Before and After Merger and Acquisition

Parth Dave; Jayen Thaker

doi:10.56209/jommerce.v4i1.90

Authors

Parth Dave Assistant Professor, Atmiya University, Rajkot
Jayen Thaker Assistant Professor, Shree KV Parekh Science, Matrushree TK Arts & Smt GS Parekh Commerce College, Mahuva

DOI:

https://doi.org/10.56209/jommerce.v4i1.90

Keywords:

Merger and Acquisition, Turnover, Statistical Tool, Financial Information, Diverse Industry, Impact

Abstract

This essay examines the acquirer company's performance in terms of turnover. Financial data and statistical tools have been used to compare performance on certain financial criteria utilizing the most popular corporate restructuring model, known as merger and acquisition. This study compares the financial outcomes of the acquirer company before and after in an effort to determine the substantial impact of merger and acquisition on turnover. The theoretical underpinnings of the strategy, objective, hypothesis, and analysis are discussed in this essay. An analysis of several transactions from diverse industries has been taken into account. According to the study, there is no appreciable impact on company turnover following merger and acquisition.

References

Allal-Chérif, O., Climent, J. C., & Berenguer, K. J. U. (2023). Born to be sustainable: How to combine strategic disruption, open innovation, and process digitization to create a sustainable business. Journal of Business Research, 154, 113379. https://doi.org/10.1016/j.jbusres.2022.113379

Alnoor, A., Khaw, K. W., Al-Abrrow, H., & Alharbi, R. K. (2022). The hybrid strategy on the basis of Miles and Snow and Porter’s strategies: An overview of the current state-of-the-art of research. International Journal of Engineering Business Management, 14, 18479790221080214. https://doi.org/10.1177/18479790221080214

Andriuškevičius, K., & Štreimikienė, D. (2021). Developments and trends of mergers and acquisitions in the energy industry. Energies, 14(8), 2158. https://doi.org/10.3390/en14082158

Bedi, H. S. (2010, February). Merger & acquisition in India: an analytical study. In National Conference on Business Innovation conducted by Apeejay Institute of Management, Jalandhar-144001, Punjab.

Caiazza, S., Galloppo, G., & Paimanova, V. (2021). The role of sustainability performance after merger and acquisition deals in short and long-term. Journal of Cleaner Production, 314, 127982. https://doi.org/10.1016/j.jclepro.2021.127982

Calipha, R., Tarba, S., & Brock, D. (2010). Mergers and acquisitions: A review of phases, motives, and success factors. Advances in mergers and acquisitions, 9, 1-24. https://doi.org/10.1108/S1479-361X(2010)0000009004

Candra, A., Priyarsono, D. S., Zulbainarni, N., & Sembel, R. (2021). Literature review on merger and acquisition (Theories and previous studies). Studies of Applied Economics, 39(4).

Choudhary, A., & Malik, D. (Eds.). (2018). Emerging Challenges in Mergers and Acquisitions. Cambridge Scholars Publishing.

Christofi, M., Leonidou, E., & Vrontis, D. (2017). Marketing research on mergers and acquisitions: a systematic review and future directions. International Marketing Review, 34(5), 629-651. https://doi.org/10.1108/IMR-03-2015-0100

Das, A., & Kapil, S. (2012). Explaining M&A performance: a review of empirical research. Journal of Strategy and Management, 5(3), 284-330.

Devers, C. E., Wuorinen, S., McNamara, G., Haleblian, J., Gee, I. H., & Kim, J. (2020). An integrative review of the emerging behavioral acquisition literature: Charting the next decade of research. Academy of Management Annals, 14(2), 869-907. https://doi.org/10.5465/annals.2018.0031

Fuad, M., Thakur, V., & Sinha, A. K. (2021). Entry timing as a mixed gamble in cross-border acquisition waves: a study of family firms. Family Business Review, 34(3), 323-341. https://doi.org/10.1177/08944865211026175

Gaughan, P. A. (2010). Mergers, acquisitions, and corporate restructurings. John Wiley & Sons.

González-Torres, T., Rodríguez-Sánchez, J. L., Pelechano-Barahona, E., & García-Muiña, F. E. (2020). A systematic review of research on sustainability in mergers and acquisitions. Sustainability, 12(2), 513. https://doi.org/10.3390/su12020513

Harrigan, K. R., & Wing, B. M. (2021). Corporate renewal and turnaround of troubled businesses: The private equity advantage. Strategic Management Review, 2(2), 363-90.

Hasija, D., Liou, R. S., & Ellstrand, A. (2020). Navigating the new normal: Political affinity and multinationals’ post‐acquisition performance. Journal of Management Studies, 57(3), 569-596. https://doi.org/10.1111/joms.12545

Hawn, O. (2021). How media coverage of corporate social responsibility and irresponsibility influences cross‐border acquisitions. Strategic Management Journal, 42(1), 58-83. https://doi.org/10.1002/smj.3212

Hossain, M. S. (2021). Merger & Acquisitions (M&As) as an important strategic vehicle in business: Thematic areas, research avenues & possible suggestions. Journal of Economics and Business, 116, 106004. https://doi.org/10.1016/j.jeconbus.2021.106004

Jallow, M. S., Masazing, M., & Basit, A. (2017). The effects of mergers & acquisitions on financial performance: Case study of UK companies. International Journal of Accounting & Business Management, 5(1), 74-92.

Karora, K., & Sahni, N. (2011). Cross Border Mergers and Acquisitions By Indian Firms-An Analysis Of Pre And Post Merger Performance.

Kaur, G. (2005). Corporate mergers and acquisitions. Deep and Deep Publications..

Koi-Akrofi, G. Y. (2016). Mergers and Acquisitions: Post-Merger and Acquisition Integration Strategies. International Journal, 5(2).

Liu, H., Li, Y., Yang, R., & Li, X. (2021). How do Chinese firms perform before and after cross-border mergers and acquisitions?. Emerging Markets Finance and Trade, 57(2), 348-364. https://doi.org/10.1080/1540496X.2018.1556636

Machiraju, H. R. (2007). Mergers, acquisitions and takeovers. New Age International.

Maher, S., & Aquanno, S. M. (2022). The new finance capital: Corporate governance, financial power, and the state. Critical Sociology, 48(1), 55-73.

Mavlutova, I., Babenko, V., Dykan, V., Prokopenko, N., Kalinichenko, S., & Tokmakova, I. (2021). Business restructuring as a method of strengtening company’s financial position. Journal of Optimization in Industrial Engineering, 14(Special Issue), 105-115. https://doi.org/10.22094/joie.2020.677839

Musah, A., Abdulai, M., & Baffour, H. (2020). The effect of mergers and acquisitions on bank performance in Ghana. Asian Journal of Economics and Empirical Research, 7(1), 36-45.

Nogueıra, S. (2020). The importance of a green marketing strategy in brand communication-M. Coutinho multi-brand car dealer case in Northern Portugal. Economics Business and Organization Research, 351-373.

Piesse, J., Lee, C. F., Lin, L., & Kuo, H. C. (2022). Merger and acquisition: Definitions, motives, and market responses. In Encyclopedia of finance (pp. 877-894). Cham: Springer International Publishing.

Rani, P., Shauki, E. R., Darminto, D., & Prijadi, R. (2020). Motives, governance, and long-term performance of mergers and acquisitions in Asia. Cogent Business & Management, 7(1), 1791445. https://doi.org/10.1080/23311975.2020.1791445

Ray, K. G. (2022). Mergers and acquisitions: Strategy, valuation and integration. PHI Learning Pvt. Ltd..

Rubinshtein, T. B. (2011). Estimating the effect of mergers and acquisitions in metallurgy. Russian Journal of Non-Ferrous Metals, 52, 516-518.

Sayeed, S. (2016). An Analysis of Post Merger Effect on Employee Engagement in Select Banks in India: A Causality Analysis (Doctoral dissertation, UNIVERSITY OF KOTA, KOTA).

Shi, W., Sun, J., & Prescott, J. E. (2012). A temporal perspective of merger and acquisition and strategic alliance initiatives: Review and future direction. Journal of Management, 38(1), 164-209. https://doi.org/10.1177/0149206311424942

Singh, K. B. (2013). The impact of mergers and acquisitions on corporate financial performance in India. Indian Journal of Research in Management, Business and Social Sciences, 1(2), 13-16.

Sridharan, N. R., & Pandian, P. A. (2002). Guide to takeovers & mergers: a complete guide to corporate restructuring, arrangements, compromises, demergers, amalgamations and acquisitions. Wadhwa and Company.

Sudarsanam, S. (2003). Creating value from mergers and acquisitions: The challenges: An integrated and international perspective. Pearson Education.

Vidal, E. (2021). Divestitures, value creation, and corporate scope. Strategic Management Review, 2(2), 413-435.

Vidani, J. (2018, February). Merger And Aquisitions: A Case From Indian Telecom Sector Vodafone & Idea. In JN Vidani (2018), Merger And Aquisitions: A Case From Indian Telecom Sector Vodafone & Idea, Compendium of Research Papers of National Conference on Leadership, Governance and Strategic Management: Key to success (Vol. 5, No. 1, pp. p105-108).