Articles by P L Beena

The corporate sector in India has witnessed a substantial growth of mergers and acquisitions since the 1990s. Through the first wave of M&As (1990-95), the Indian corporate houses seem to have been bracing up to face foreign competition, while the second wave (since 1995) saw a significant involvement of multinational firms. The macroeconomic policy changes in India facilitated the third wave of merger movement since 2000 - i e, overseas acquisitions by the Indian firms. A large number of mergers were between firms belonging to the same business groups and product lines with a view to increase their respective controlling blocks and market power. The performance of acquiring firms in 1990-2005 was relatively better as compared to that of the Indian private corporate manufacturing sector. However, this study does not find significant evidence of improvement in their performance in terms of various parameters during the post-merger phase as compared to the pre-merger period. The study argues that it is not efficiency-related factors that influenced M&A activities in the Indian corporate sector. An appropriate competition policy needs to be designed so as to address the possible anti-trust implications of overseas mergers for India, as well as to deal with M&As among Indian enterprises.