Introduction The Indian cement industry is dominated by 20 companies, which account for almost 70% of the total cement

production in India. The companies all over India have produced 11 MT cement during April-September 2009. The Indian Cement industry plays a major role in the growth of the nation for that case in any country. Industry Cement Industry was under full control and supervision of the government. However, it got great relief at a large extent after the economic reform which made its growth easier. Still government interference, especially in the pricing, is evident in India. In the year 1956 the Indian Cement Industry saw the price and distribution control system, which was established to ensure fair price model for consumers as well as manufacturers. Later, government authorized new manufacturing units (as well as existing units going for capacity enhancement) to put a higher price tag for their products in the year 1977. After some years, government introduced a three-tier pricing system with different pricing on cement produced in high, medium and low cost plants. In 1982 Government of India introduced a quota system to give impetus to the cement industry. A quota of 66.60% was imposed for sales to Government and small real estate developers. Lower quota at 50% was effected for new units and sick units. The remaining 33.40% was allowed to be sold in the open market. These changes had the desirable effects on the Indian Cement industry. Profitability of the manufacturers increased substantially, but such rising input cost was a cause for concern. Complete freedom to the cement industry was given in the year 1989, to gear it up to meet the challenges of free market competition due to the impending policy of liberalization. In 1991 the industry was de- licensed which resulted in an accelerated growth for the industry and availability of state of the art technology for modernization. Major players invested heavily for capacity expansion and the industry laid greater focus on exports to maximize the opportunity available in the form of global markets. The role of the government has been extremely crucial in the growth of the industry. Indian Cement Industry is the second largest cement producer in the world after China with a total capacity of 151.2 Million Tonnes (MT). Government of India has been giving immense boost to various infrastructure projects, housing facilities and road networks, the cement industry in India is currently growing at an enviable pace. In the coming years more growth in the Indian cement industry is expected to come. It is predicted that the production in India would rise to 236.16 MT in FY11 & expected to rise to 262.61 MT in FY12 in the Cement Industry. The Indian cement industry is dominated by 20 companies, which account for almost 70% of the total cement production in India.The companies all over India have produced 11 MT cement during April-September 2009. The Indian Cement industry plays a major role in the growth of the nation for that case in any country. Industry Cement Industry was under full control and supervision of the government. However, it got great relief at a large extent after the economic reform which made its growth easier. Still government interference, especially in the pricing, is evident in India.

In spite of it being second largest cement producer in the world, Indian Cement industry falls in the list of lowest per capita consumption of cement with 125 kg. The reason for this is poor rural people who mostly live in mud huts and cannot afford to have the commodity. The demand and supply of cement in India has grown up over the years. In a fast developing economy as India there is always large possibility of expansion of cement industry. The Indian cement industry is one of the vital industries for economic development. The total utilization of cement in a year is used as an indicator of economic growth. Cement contributes as a necessary constituent of infrastructure development and a key raw material for the construction industry, especially in the government's infrastructure development plans in the context of the nation's socio-economic development. Size of the Industry The Cement Industry in India is the second largest in the world. Cement Industry constitutes of 140 large and more than 365 mini cement plants. The Indian Cement Industry's capacity at the beginning of the year 2009-10 was 217.80 million tonnes. The Indian Cement Industry comprises of 125 units with an installed capacity of 148.28 million tonnes and more than 300 mini cement plants with an estimated capacity of 11.10 million tonnes per annum. Actual Indian cement production in 2002-03 was 116.35 million tonnes as against a production of 106.90 million tonnes in 2001-02, registering a growth rate of 8.84%. Keeping in view the trend of growth of the industry in previous years, a production target of 126 million tonnes has been fixed for the year 2003-04. During the period April-June 2003, a production (provisional) was 31.30 million ton es. The industry has achieved a growth rate of 4.86 per cent during this period. Total Contribution to the economy / sales The Indian Cement Industry comprises of 125 large cement plants with an installed capacity of 148.28 million tonnes and more than 300 mini cement plants with an estimated capacity of 11.10 million tonnes per annum. The Cement Corporation of India is a Central Public Sector Undertaking which has 10 units. State Governments owns 10 large cement plants. Indian Cement production in 2002-03 was 116.35 million tonnes as against a production of 106.90 million tonnes in 2001-02, registering a growth rate of 8.84%. The Major players in cement production are Ambuja cement, Aditya Cement, J K Cement and L & T cement. Domestic and Export Share Apart from meeting the entire domestic demand, the Indian Cement industry is also exporting cement and clinker. During 2001-02 and 2003-04 the export was 5.14 million tonnes and 6.92 million tonnes respectively. During 2003 the export was 1.35 million tonnes. The Major exporters were Gujarat Ambuja Cements Ltd. and L&T. It is expected that the cement industry will steadily grow and more than 50 million tons will be produced annually to cater the high demand in the real estate sector. There will be significant increase in the production by around 9 to 10% which will favorably affect the overall Gross Domestic Product of the country.

Employment Opportunities The Indian Cement industry in India consists of organized and the unorganized sector. Organized sector constitutes the cement producing industries while the main players of the unorganized sector are the regional and local cement producing units in various states across the state. Job opportunities are available in organized and the unorganized sector. In most cases, one needs to have some type of expertise in architecture in order to get a job in this sector. There are many opportunities for site engineer, packaging engineer, shift in charge, surveyor, geologist, contractor, supervisor and other posts. Pollution In Pollution Category, the Indian Cement Industry is under the "Red" Category which represents highly polluting industries. Latest Developments

The Indian cement industry is expected to grow steadily in 2010-2011 and increase capacity by another 50 million tons in spite of the recession and decrease in demand from the housing sector. The industry experts project the sector to grow by 9 to 10% for the current financial year provided India's GDP grows at 7%. India ranks second in cement production after China. The major companies have made investments to increase the production capacity in the past few months, heralding a positive outlook for the industry. The housing sector accounts for 50% of the demand for cement and this trend is expected to continue in the near future.

The Indian Cement Industry with Modernization and technology up-gradation has become a continuous process for industry. At present international standards and benchmarks in the quality of cement and building materials produced are met in India and is able to compete international markets. Substantial technological improvements have been bought in the industry for which we can legitimately be proud of its state-of-the-art technology and processes incorporated in most of its cement plants. This particular technology up gradation is resulting in increased capacity, reduction in cost of production of cement. In 2003, a Cris Infac study mentioned that the cement industry could had the capacity addition of approximately 50 MT by 2008, of which Greenfield expansions would contribute 40 MT while debottlenecking of the plants and increase in blending ratios would add another 10 MT, taking the total capacity of the cement industry to around 180 MT. Trade situation in emerging markets The global cement industry has undergone a period of significant change over the past decade, driven by the demands of a globalised economy. While the traditional markets of Europe and the US continue to grow, primarily led by public sector investment, the most significant developments are however to be found in the emerging economies. They have, in recent years become the most significant players in the cement market, in terms of

consumption, growth and investment. In emerging economies from Asia to Eastern Europe, cement has become the glue of progress. Some 80% of cement is made in and used by emerging economies; China alone makes and uses around 50% of global output. Rapid increase in infrastructural development activity among CIS countries (Commonwealth of Independent States), has led to rapid increase in cement production in both Russia and Ukraine. In Ukraine production is doubling every four years, making it the second largest cement producer in the region after Russia. Infrastructure growth in the CIS is driven by a number of factors such as strong macroeconomic fundamentals; growing business and consumer demand for improved infrastructure services, such as roads, ports, airports and utilities; relative underinvestment in infrastructure since the early 1990s; an acceptance by government authorities of the key role of the private sector in accelerating infrastructure development; recent introduction of legal frameworks designed to facilitate private investment in the sector. Since the future of the cement sector is so intricately linked with the continued economic growth in emerging economies, the paper assesses the trade situation in emerging markets, excluding India.

As per the data available, during the period from 2001- to 2008, while the world cement trade grew at a CAGR of 15.5%, the growth in trade for these economies was around 23.5%. The increased demand for cement in emerging markets may be attributable to rapid economic growth and greater public and private sector investment in these countries. Ukraine witnessed the highest growth in cement trade, with a CAGR of 55.7%. The rapid increase in Ukraines cement trade may be attributable to rapid growth in both cement exports and imports. Ukraines major trading partners in cement are primarily Commonwealth of Independent States (CIS), with exports destined to Russia, Kazakhstan, Azerbaijan, and Turkmenistan. Nigeria, Vietnam and Egypt followed Ukraine with a CAGR of 47.8%, 46.2% and 41% respectively. Chinas cement trade increased at a CAGR of 28.3%, during the period under consideration. This is above the world average but below the trade growth in other emerging economies. Apart from the high base effect, this relatively low performance may be explained by slower growth in Chinas cement imports, which increased at 12.4%, compared to exports, which grew at a CAGR of close to 30%. Indias Cement Trade

Cement has traditionally not14 been among Indias major traded products. During 2008, India was the 44th largest cement-trading nation in the world. However, increased focus on infrastructure development in recent years has led to a splurge of construction activity in the country, resulting in higher cement imports and hence trade. Trade in cement is also underway with the neighbouring countries and countries in Africa and West Asia. L&T (now a part of Grasim), Gujarat Ambuja Cements 13 Cement Manufacturers Association 14 During 2008, India was ranked 44 among the list of major cement trading nations. Ltd and Jaiprakash Industries are the top exporters. The western region, due to its proximity to the coasts, accounts for 92.4 per cent of total exports, of which Gujarat holds a share of 76 per cent. During the period from 2001 to 2008, Indias cement trade increased from US$ 4.1 million to US$ 44.2 million, a CAGR of 40.3%. The increase in trade was led by rise in imports, which increased, from US$ 0.3 million in 2001 to US$ 37.1 million in 2008, at a CAGR of 91.3%. Indias cement exports on the other hand increased at a CAGR of 9.9%, from US$ 3.7 million to US$ 7.2 million. China was Indias main source of cement imports, during 2008 with imports worth US$ 13.9 million followed by Italy and Taiwan with imports worth US$ 13.5 million and US$ 2.5 million, respectively. Indias top five import sources together accounted for close to 92% of Indias total cement imports during 2008.

Malaysia and UAE were the major destinations for Indias Cement exports during 2008. The two countries together accounted for 63% of Indias total cement IBEF exports. These countries were followed by Germany, Maldives and USA, which accounted for 6.8%, 5.7% and 3.6% of Indias total cement exports.

India has an immense potential to tap cement markets of countries in the Middle East and South East Asia due to its strengths of location advantage, large-scale limestone and coal deposits, adequate cement capacity and production of world class quality of cement with the latest technology. However for this Indian cement industry will have to become cost competitive vis--vis China. Cement companies in India often complain that the entire gamut of direct and indirect taxes and the freight for transporting cement from hinterland to the port substantially increases the price of cement. Moreover the infrastructure facilities at port to handle bulk/bagged cement are poor leading to delays in exporting cement. Issues The input costs that primarily control the price of cement are coal, electricity tariffs, railway transport and freight, royalty and cess on limestone. However, interestingly, government controls the prices of all these components. The main concerns that industry faces in using these inputs for cement production are as follows: Coal: Coal is the main fuel for manufacture of cement in India. The consumption of coal in a typically dry process system ranges from 20-25% of clinker production.20 This means for per ton clinker produced 0.20-0.25 ton of coal is consumed. The cement industry consumes about 10 million tonnes of coal annually. Since coalfields like Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL) supply poor21 quality of coal, the industry has to blend high-grade coal with it. However, non-coking coal and petroleum coke attracts a customs duty of 5%, which increases the cost of production in the sector. Electricity: Cement industry consumes about 5.5 billion units of electricity annually with one tonne of cement requiring approximately 120-130 units of electricity. Since state governments supply electricity in India and since different states have different tariff structure, the power tariffs vary according to the location of the plant and on the production process. As a result, cement plants in different states attract different power tariffs. Another major hindrance to the industry is severe power cuts. Most of the cement producing states such as Andhra Pradesh, Madhya Pradesh experience power cuts to the

tune of 25-30% every year causing substantial production loss. 30% compared to imported coal of high calorific value (7,000-8,000 kcal/kg) with low ash content 6-7%. Limestone: This constitutes the largest bulk in terms of input to cement. For producing one tonne of cement, approximately 1.6 tonnes of limestone is required. Since, the plants near limestone deposits pay less transportation cost than others, the location of cement plant is determined by the location of limestone mines. The total limestone deposit in the country is estimated to be 90 billion tones, with Andhra Pradesh enjoying the largest share of 34%, followed by Karnataka, Gujarat, Madhya Pradesh and Rajasthan, with respective shares of 13%, 13%, 8%, and 6.5%. However, cement manufacturing companies have to shed large sums of money by way of royalty payment to the central government and cess on royalties levied by the state government. Transportation: Cement is mostly packed in paper bags now. It is then transported either by rail or road. Road transportation beyond 200 kms is not economical therefore about 55% cement is carried by the railways. There is also the problem of inadequate availability of wagons especially on western railways and south-eastern railways. Under this scenario, there is a need to encourage transportation through sea, which is not only economical but also reduces losses in transit. Today, 70% of the cement movement worldwide is by sea compared to 1% in India. Firm level performance The performance of the cement industry is directly linked with the performance of the economy. A robust economy with booming construction activities ensures higher cement consumption. The same is true for the Indian cement industry. A look at Figure below shows Indias GDP growth and the growth in Profit After Tax (PAT) of Indias Cement industry closely follow each other.

During 2002-03, when Indias GDP growth slumped to 3.8%, PAT of Indian cement industry fell by close to 30% over its level in 2001-02. Similarly when Indian GDP growth increased to

9.7% in 2006-07, PAT of the cement industry skyrocketed to 199%, and the industrial sales jumped to 41.1%. Structure of the Indian Cement Industry The structure of the industry can be viewed as fragmented, although the concentration at the top has increased, as the top 10 players control around 73% of market share, which was 70% during 1990-91, whereas the other 27% of market share is distributed among 32 players. This is also confirmed by the results of Herfindahl Index22 (HI). The HI is a measure of industry concentration equal to the sum of the squared market shares of the firms in the industry and an indicator of amount of competition among them. Our calculations show a very low value of Herfindahl index in the cement industry in India, indicating a very high competition and a low market power. High level of competition in the cement industry is a result of the low entry barriers and the ready availability of technology.

Major Domestic Players Associated Cement Companies Ltd (ACCL): Associated Cement Companies Ltd manufactures ordinary Portland cement, composite cement and special cement and has begun offering its marketing expertise and distribution facilities to other producers in cement and related areas. It has fifteen manufacturing plants located throughout the country. Birla Corp: Birla Corp's product portfolio includes acetylene gas, auto trim parts, casting, cement, jute goods, yarn, calcium carbide etc. The cement division of the company has seven plants, with an installed capacity of 57.8 lakh tonnes. The company has two plants in Madhya Pradesh, Rajasthan and West Bengal and one in Uttar Pradesh and holds a market share of 2.8 per cent. It manufactures Ordinary portland cement (OPC), portland pozzolana cement, fly ash-based PPC, Low-alkali portland cement, portland slag cement, low heat cement and sulphate resistant cement. Large quantities of its cement are exported to Nepal and Bangladesh. Century Textiles and Industries Ltd (CTIL): The product portfolio of CTIL includes textiles, rayon, cement, pulp & paper, shipping, property & land development, builders and floriculture. Cement is the largest division of CTIL and contributes to over 40 per cent of the company's revenues. The company has an installed capacity of 7.8 million tonnes. CTIL has four plants that manufacture cement, one in Chhattisgarh, two in Madhya Pradesh and one in Maharashtra. Grasim Cement: Grasim's product profile includes viscose staple fibre (VSF), grey cement, white cement, sponge iron, chemicals and textiles. With the acquisition of UltraTech, L&T's cement division in early 2004, Grasim has now become the world's seventh largest cement producer with a combined capacity of 45.7 million tonnes. Grasim (with UltraTech) held a market share of around 16.7 per cent in 2008-09. It has plants in Madhya Pradesh, Chhattisgarh, Punjab, Rajasthan, Tamil Nadu and Gujarat among others. Ambuja Cements Ltd (GACL): Gujarat Ambuja Cements Ltd was set up in 1986. In the last decade the company has grown tenfold. The total cement capacity of the company is 18.5 million tonnes. The company has a market share of around 10 per cent, with a strong foothold in the northern and western markets. Gujarat Ambuja is India's largest cement exporter and one of the most cost efficient firms. India Cements: India Cements is the largest cement producer in southern India with three plants in Tamil Nadu and four in Andhra Pradesh. The company has a market share of 5.4 per cent. Jaiprakash Associates Limited: Jaiprakash Industries, now known as Jaiprakash Associates Limited (JAL) is part of the Jaypee Group with businesses in civil engineering, hospitality, cement, hydropower, design consultancy and IT.

 Madras Cements: Madras Cements Ltd is one of the oldest cement companies in the southern region and is a part of the Ramco group. The company is engaged in cement, clinker, dolomite, dry mortar mix, limestone, ready mix cement (RMC) and units generated from windmills. The company has three plants in Tamil Nadu, one in Andhra Pradesh and a mini cement plant in Karnataka. It has a total capacity of 10 million tonnes annually and holds a market share of 4 per cent. Analysis of Cement Industry Supply Position The installed capacity of the sector over the seven years period, from 2000 to 2008, has grown at5.3% compounded annually. While the production grew at 7.4% per annum. The production in the sector grew at a much higher rate than the capacity in the preceding years. Looking ahead the production of the industry could see about 85% capacity utilization due to additional capacity being built. It is estimated that by FY 2010-2011 the total capacity for the sector would be close to 250million tonne.

The increasing trend in cement consumptions from FY03 had led to an increase in the capacity utilization of the cement sector. The capacity utilization has moved from 76% in FY02 to 95 % inFY07. But going forward when all capacity addition has taken place and the plants are commissioned one could see a huge surplus being built. This could lower the realization margins of the companies and increase cost pressures. This would also contribute to the change in demand supply scenario, where the supply would be in excess of the total demand for the commodity.

Demand Position Sectoral demand for cement Demand for cement is linked to the economic activity in any country. Broadly, it can be categorizedinto demand for housing construction (homes, offices etc.) and infrastructure creation (ports, roads,power plants etc). The real driver of cement demand is creation of infrastructure, hence cementdemand in emerging economies is much higher than developed countries where the demand hasreached a plateau. In India too, the demand for cement will be affected by spending oninfrastructure (including housing) Fuelling demand- The following factors have increased demand for cement over the years: Growth in housing sector (over 30%)-is a key demand driver as it accounts for 60% of demand Infrastructure projects like ports, airports, power projects, dam & irrigation projects. Theproportion of cement consumed by infrastructure projects is expected to increase fromcurrent 15% to 25-30%. About 10 million tonnes of cement demand will result from Kalpasar project planned for water deployment for Saurashtra National Highway Development Programme- This consists of golden quadrilateral and North-South and East-West corridor projects . Budget support on NHDP increased to 99.45billion dollars. Bharat Nirman Yojana for rural infrastructure- Outlay on bharat nirman to the tune of 186.96billion. Rise in industrial projects Capex plans by corporates Greenfield and brownfield expansions. Export potential Capital spending continues to be strong Uptrend in industrial cycle Avg. IIP growth at 10.2% being strongest in the past 11 years Retails- Malls and Multiplexes Competitiveness of firms In the overall profitability rankings, Grasim Industries Ltd, was the most profitable company in the Indian market, followed by Ambuja Cements and ACC Ltd. Over a period from 2000-01 to 2008-09, the profits of Grasim Industries grew at a CAGR of 17.7%, and that of Ambuja Cements increased by 14.1%. ACC Ltd and Shree Cement Ltd saw the fastest increase in profits among the top five most profitable cement firms in the Indian market. While the profits of ACC Ltd increased at a CAGR of 40.5%, the profits of Shree Cement Ltd increased at a CAGR of 49.7%.

Competitiveness of firms In the overall profitability rankings, Grasim Industries Ltd, was the most profitable company in the Indian market, followed by Ambuja Cements and ACC Ltd. Over a period from 2000-01 to 2008-09, the profits of Grasim Industries grew at a CAGR of 17.7%, and that of Ambuja Cements increased by 14.1%. ACC Ltd and Shree Cement Ltd saw the fastest increase in profits among the top five most profitable cement firms in the Indian market. While the profits of ACC Ltd increased at a CAGR of 40.5%, the profits of Shree Cement Ltd increased at a CAGR of 49.7%. Profit Margin A look at the profit margin of all the cement companies in India shows that the profits per rupee of sales stood in the range of 0.01% and 0.29%, during 2008-09, which was lower than the profit margins during 2006-07, when the cement industry was booming. During 2006-07 profit margins stood in the range of 0.1% and 0.5%. Apart from the decline in cement demand, due to financial crisis, the decline in profit margins may be attributable to excess capacity and decline in cement prices during the period. Interest incidence The cost of capital, on the other hand, for cement companies declined, during 2008-09, compared to 2006-07, when the interest incidence on profits was in the range of 5% to 70%. Interest incidence during 2008-09 was in the range of 5% to 25%. This could be explained by various liquidity infusion measures that the Reserve Bank of India initiated towards the latter half of 2008 to reduce the cost of credit for Indian industry.

Gross Fixed Assets Turnover Ratio During 2008-09, the gross fixed assets turnover ratio for Indian cement companies 0% to 2.7%, in the same range as during 2006-07.

Literature Review Globalization, competition and a dynamic market has brought about a significant change in the world economy and the way businesses operate. Trillions of dollars have been spent in the acquisition of thousands of firms (Gupta and Gerchak, 2002). In order to stay competitive, many companies around the world have merged with each other with a motive to expand into new markets, incorporate new technologies and/or enhance revenue (Harpeslagh& Jemison, 1991). Mergers and acquisitions (M&As) continue to play an important role in shaping business activities worldwide. They have become an important business strategy to help improve organizational performance. M&A are undertaken on the assumption that the combined company will have a greater value than the two companies alone (Mirvis and Marks 1992). Meaning of Mergers and Acquisitions Mergers occur when two organizations willingly agree to collaborate with each other by joining their available assets, liabilities, and cultural values on a relatively equal basis across different businesses and industries. In contrast, acquisitions occur when one organization buys and takes over the operations of another organization. (Horwitz et al. 2002) The terms Mergers and Acquisitions are used interchangeably because the result is the Mergers and Acquisitions Performance EvaluationA Literature Review 38 SIES Journal of Management, September 2012, Vol. 8(2) same one company takes control over another (Halperin& Bell, 1992), thus the firms activity is sometimes referred to as Merger and Acquisition (M&A). Effects of M&A on Corporate Growth and Proiftability It is a widely held view that a strategic solution to financial distress in corporate organizations is mergers and acquisitions. This view remains a presumption, which has not been empirically tested through a research study. Corporate organizations facing difficulty have in recent times often followed or are compelled by regulators to follow the path of extensive reconstruction through mergers and acquisitions, apparently as the only option to liquidation. This paper fills a gap in the literature by investigating the effects of mergers and acquisitions on the efficiency, growth and profitability of corporate organizations in the post consolidated environment of the Nigerian banking industry. The methodology used is a survey of companies incorporated in Nigeria under the Companies and Allied Matters Act [1990], which have undergone a merger or an acquisition process. The elements of the survey were selected randomly. A total of ten incorporated banks were selected using simple random sampling technique. The collected data were analyzed using key financial ratios. The results support the idea that mergers and acquisitions are not a prima facie solution to the problem of financial distress in corporate organizations. This is especially so when mergers are regulatory imposed than business environment driven. The study further revealed that while mergers and acquisitions can drive growth and profitability in some organizations, operating efficiency suffers at least in the short-term in the post merger and acquisition corporate entity. The evidence also shows that mergers and acquisitions provided only a temporary solution to financial distress and no solution at all to operating indiscipline.

Prediciting Acquisitions in India Statistical models for predicting takeover targets by using publicly available information, specifically historical accounting information, has attracted considerable academic endeavour. These empirical studies draw from the stylized fact that has unequivocally emerged from literature on performance of mergers and acquisitions: that target firms gain abnormal returns when a takeover announcement is made. Hence, it has been hypothesized that early prediction of takeover targets can stimulate strategic trading that can consistently beat the market, and make abnormal returns. While it has now been generally proven that such a strategy cannot succeed within semi-strong efficient markets, attempts continue to construct such prediction models to identify potentially valuable firms that can at least provide higher returns under a new management with synergistic propositions. Besides, the characteristics identified by a robust model are also used for preliminary exploration for a potentially good target by acquirers. Following this strand of literature, this paper builds a prediction model for acquisition targets in India using logistic regression. For the estimation of the logistic regression, 122 target firms of acquisitions during the three year-period from 2002 to 2005 were considered, and matched with non-acquiring, non-target firms that had similar promoters holdings and belonged to the same industry as the target. Results from logistic regression indicate that, a typical target is inherently strong with high growth and large free cash flow, in spite of high debt levels, but encumbered by an inefficient management, who are probably disciplined by takeover market. Traditional determinants of US and UK studies, viz., size and growth-resource imbalance are not significant in the Indian context. Methodological care was taken at various steps to avoid known biases. Estimation period was taken for a modest three year period rather than a longer period to ensure minimal changes in the macro-economic landscape that might have a bearing on the target characteristics. Further, both raw accounting ratios, and industry adjusted ratios were used to account for non-normality of such data. To build the prediction model, cut-off values were calculated using two methods, one that minimized statistical errors and another that maximized returns; again, the latter was found to be superior. Finally, the prediction model was tested on an out-of-sample database of acquisitions that took place during 2005-2006 and was found to yield prediction accuracies up to 91 per cent. Behavioural Aspect of M&As in India In the turbulent global economy, mergers and acquisitions of industries takes place to protect Indian businesses. Such mergers and acquisitions are taking place in Heavy Industries and in major service industries. This paper investigates the context, process and consequences of the merger of State Bank of Indore with the largest nationalized banking firm, State Bank of India. Due to inadequate emphasis on the human resource aspect, employee resistance acted as impediment to merger of these two banks and delayed the process. This paper develops a model, which can help the industry achieve smooth changes without employee resistance.

References http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=8de9519c-9c38-496e-979d933f0e80ea66%40sessionmgr14&vid=2&hid=27 http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=cb8e4497-2338-4f71-a24ee4c891ef36d4%40sessionmgr11&vid=2&hid=126