Return from Indian Acquisitions: Does Deal Size Matter?

Leepsa, N. M. & Mishra, C. S., 2014. Return from Indian Acquisitions: Does Deal Size Matter?
Co-author: Dr. Chandra Sekhar Mishra, VGSoM, IIT Kharagpur

Mergers and acquisitions are the corporate growth strategy that has grown in recent years. The performance of companies in post-acquisition period is influenced by various factors; one of the factors which remain explored is deal value. This paper attempts to investigate the post-acquisition performance of manufacturing companies in India based on their deal size-small and large deal size. Performance is evaluated on profitability parameters (return on capital employed, return on net worth, return on assets) of the company in pre and post-acquisition three years using paired t-test and Wilcoxon signed rank test. It is found that for the variable ROApost12 and ROApost123, the post-acquisition performance is positive for large deals while negative for small deals. There is no difference in ROApost1 performance in pre and post-acquisition performance in case of small deals while negative performance in ROApre1 in the post-acquisition first year. For the rest variables, ROCE and RONW, the large and small deals perform in a similar manner, but the results of large deals are more significant than small deals.

Citation: Leepsa, N. M., & Mishra, C. S. (2014). Return from Indian Acquisitions: Does Deal Size Matter, International Conference on Electrical, Electronics, Computer Science and Mathematics Physical Education and Management (ICEECMPE),May 25th, 2014.New Delhi, India., conference proceedings

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