Professional Documents
Culture Documents
Acquisition on
Performance
CONTENT
1)
2)
3)
4)
5)
Introduction
Research Methodology
Findings
Suggestions
Conclusion
INTRODUCTION
Merger
A merger occurs when two or more companies combines and the
resulting firm maintains the identity of one of the firms.
Example:Company A + Company B = Company B
Acquisition
An acquisition usually refers to a purchase of a smaller firm by a
larger one.
Horizontal
Vertical
Conglomerate
Crossborder
To increase profit
To get benefit of economize of scale
To get the benefit of synergy
Growth in market share.
To enhance reputation
Access to additional management or technical talent.
To reduce competition
To reduce distribution costs
RESEARCH METHODOLOGY
Statement of the problem :To know the impacts of Merger and Acquisition on financial
performance of Indian banking sector
To evaluate the impacts of merger and acquisition on the profitability of the selected
Indian banks during the study period
To evaluate the impacts of merger and acquisition on the liquidity of the selected
Indian banks during the study period
To compare the overall performance of selected Indian banks for pre and
merger
Secondary objective
To study why the banks are going towards merger and acquisition
post
Secondary Data
o Website
o News paper
o Magazine
Selection of sample
Sample size
:-5
Sample Unit
:- Indian banks .
Sampling Technique
: - Systematic Sampling
Tools of analysis
Ratio analysis
o Liquidity ratio
o Profitability ratio
Statistical analysis
o Mean
o Differences
o Standard deviation
Alternate Hypothesis:
The banks which we selected for our study may adopt Window Dressing
which creates effect on our study.
For this study we have taken only 3 years data for both before and after
merger and acquisition, to compare the performance of selected units.
Ratio Analysis
Ratio
Before
M&A
After
M&A
tc
tt
Result
Cash Deposit
6.926
8.596
-1.844
2.776
H0
12.21
11.72
0.28
2.776
H0
0.9
0.81
0.517
2.776
H0
Debt to Equity
166.62
232.11
-6.205
2.776
H0
Debt to Asset
0.856
0.858
-0.156
2.776
H0
0.011
0.012
-0.259
2.776
H0
Interest Coverage
1.386
1.308
1.188
2.776
H0
Liquidity
Loan to Deposit
Cont
Profitability
Net Profit
11.8
10.8
0.816
2.776
H0
Interest Expense
42.2
46
-1.257
2.776
H0
Return on Asset
1.06
0.87
2.979
2.776
H1
69.47
69.95
-0.115
2.776
H0
20.24
24.03
-3.130
2.776
H0
ROGCE
0.11
0.09
1.370
2.776
H0
RONCE
0.13
0.10
1.743
2.776
H0
0.16
0.13
1.004
2.776
H0
128.03
146.05
-1.695
2.776
H0
Return on investment
19.18
22.35
-3.265
2.776
H0
FINDINGS
Cont
IOB shows the increasing trend in before and after merger in Debt
to Equity ratio and IDBI also represent the same result but with
high increment in after merger as compare to before.
SUGGESTIONS
Cont
The bank should not merge with weak unit which created negative
impact on their financial performance.
CONCLUSION
The activity of merger and acquisition is a very rational as well as
risky as it create an adverse effect on the financial performance if
wrong selection of unit is there.
THAN
K Y OU