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Impact Of Mergers On Corporate Performance: A Sample Study Of Indian Textile Industry




For several years large number of studies has been conducted to gauge the impact of mergers and acquisitions activity on the corporate performance. The results of these studies have been found contradictory. When tested on the 13 sample firms from Indian Textile industry that have experienced merger from 2001 to 2008 we found that there has been significant deterioration in the profitability position of these companies in the post-merger period. Finally, on applying the 49 days event window it is observed that the shareholders of acquirer firm has witnessed a falling cumulative average abnormal return around the merger announcement period, thus indicating that even the stock market has not responded favourably to these companies’ merger decisions.

Suggested Citation

  • Amarjit Saini & Ravi Singla, 2012. "Impact Of Mergers On Corporate Performance: A Sample Study Of Indian Textile Industry," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 4(3 (Decemb), pages 284-292.
  • Handle: RePEc:shc:jaresh:v:4:y:2012:i:3:p:284-292

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    Impact of mergers; Event study; AAR; CAAR; Ratio analysis; Indian textile industry mergers.;

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment


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