Post merger and acquisition financial performance analysis : A case study of select Indian airline companies

Abstract

Mergers and Acquisitions are important corporate strategy actions that aid the firm in external growth and provide it
\ncompetitive advantage. In today’s globalized economy, mergers and acquisitions (M&A) are being increasingly used the world over, for improving competitiveness of companies through gaining greater market share, broadening the portfolio to reduce business risk, for entering new markets and geographies, and capitalizing on economies of scale etc. This paper has focused on the performance of Ind
\nian Airline Companies after the consolidation of Airline sector in year 2007-08. The main objective of this paper is to analyze whether the Indian Airline Companies have achieved financial performance efficiency during the post
\nmerger & acquisition period specifically in the areas of profitability, leverage, liquidity, and capital market standards. Paired sample t-test has been performed to determine the significance differences in financial performance standards two year before and two year after the merger activity. In general, Airline Companies merger in India does not bring significance difference on
\nthe financial performance after the merger.
\nThe finding of this study shows that there is no improvement insurviving Company’s return on equity, net profit margin, interest coverage, earning per share and dividend per share post-merger&acquisition.