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MUDRA: Journal of Finance and Accounting
Year : 2018, Volume : 5, Issue : 2
First page : ( 60) Last page : ( 69)
Print ISSN : 2347-4467. Online ISSN : 2395-2598.
Article DOI : 10.17492/mudra.v5i2.14330

Effect of Mergers and Acquisitions on Performance of Enterprise Value

Sathishkumar T.1, Tamby P.N. Assai2

1Lecturer in Commerce, GHSS, Neravy, Karaikal, Puducherry, India. E-mail: sathishvethathiri@yahoo.com

2Department of Revenue and Disaster Management, Puducherry, India. E-mail: assai_ma@yahoo.co.in

Online published on 9 April, 2019.

Abstract

In this study, we have made an analysis on the impact of Mergers and Acquisitions (M&A) on the performance of Enterprise Value in the post-merger period. For this purpose, ten firms were selected based on the adequacy of data for a period of ten years on a year-to-year basis from 2006–2007 to 2016–2017. The firms, which had gone into the M&A process during the financial year 2011–2012 are also considered for the study. Paired samples t-test is applied to study the mean difference in performance of Enterprise Value of the acquiring firms in the pre-and post-merger periods. From the analysis, it has been found that the acquiring firms drastically improved in stock price and business performance. As a result the acquiring firms are visible among competitors with a capacity to develop into something big in the future and merged firms feel that they have chosen a good acquirer firm. Hence, most of the acquiring firms have significant change in the performance of Enterprise Value in the post-merger period.

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Keywords

Mergers, Acquisitions, Enterprise value, Post-merger performance, Firm Performance.

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