Journal of Applied Finance & Banking

Mergers and Acquisitions: A Pre-post Risk – Return Analysis for the Indian Banking Sector

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• Abstract

  The purpose of this paper is to examine the comparative position of pre & post-merger stock risk-return performance of selected banks. Study covers comparison of Systematic and unsystematic risk during pre & post-merger period. Using data drawn from money control and yahoo finance this present exploratory study covers a sample of six banks, which were got, merge during year 2004 to 2010. Stock risk-return analysis has presented mix evidence, i.e. for some banks after merger performance has improved whereas for few banks it has decreased. Finally, evidence shows that proper analysis before merger deal can improve bank’s performance. Because of the chosen research approach, the research results may not be generalizable for all banks. The paper includes implications for top management of banks in designing merger deal, which can be beneficial for them to have synergy gain in terms of financial, stock performance and wealth maximization.