Impact of Merger and Acquisitions on Financial Performance of Selected Healthcare Companies in India

Nidhip Shah

Lecturer, College of Commerce

Silver Oak University, Ahmedabad

Dr. Dharini Patel

Assistant Professor, Faculty of Commerce,

GLS University, Ahmedabad

Keywords: Merger and Acquisitions, Health-care, financial performance.

In today’s world, Mergers and Acquisitions have become a significant component from the aspect of global financial and economical viewpoint. Since 1991 there has been a rapid growth in the competitiveness among the companies at both international and domestic level. Hence M&A activities have stolen the spotlight for expanding business and increasing market share. But it’s more likely that every strategy has its pros and cons and therefore several literature reviews related to M&A suggest mixed outcomes of the post M&A performance in different countries. The present study is intended to study the impact of Merger and Acquisition on the financial performance of the selected acquiring companies of India in the Health-care sector. In 2017, total of 115 transactions were announced worldwide in the health - care sector which represents the highest number since 2000. The study is attempted to find out the difference between the pre-merger/acquisition and post-merger/acquisition financial performance of the acquiring companies by analysing various financial ratios. For the present study, top 10 BSE listed companies of the health-care industry in India have been selected on the basis of market capitalization. Out of those 10 companies those companies which have undergone merger/acquisition between 2015-2018 have been selected as the final sample for the study. Financial ratios such as Gross Profit Margin, Net Profit Margin, return on capital Employed etc are analysed by applying paired sample t-test as main statistical tool. The scope of the study is limited to only the acquiring companies in the health-care sector of India.

Keywords:Merger and Acquisitions, Health-care, financial performance.

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