The Impact of Mergers and Acquisitions on the Profitability of Indian Pharmaceutical Industry

Abstract

In today’s globalized economy, the main objective of every firm is to make profits and enhance the shareholders’ wealth. In the global market, a number of companies among Indian pharmaceuticals have entered into Merger and Acquisition agreements. The objective of the study is to evaluate the impact of Merger and Acquisition on the Profitability of select pharmaceutical companies. For the present study, 8 pharmaceutical companies listed under BSE which involved in M&A activities in India after recession period i.e. after 2007 were chosen. The analysis is based on the various profitability ratios which are compared between pre and post-event periods. Other statistical tools- Mean, Standard Deviation, Co-efficient of Variation and Paired ‘t’ test have been used in this research.