Authors:
Zaib Maroof
and
Muhammad Jawad
Affiliation:
Department of Leadership & Management Studies, National Defence University Islamabad, Pakistan Lahore Business School, University of Lahore Islamabad and Pakistan
Keyword(s):
Merger & Acquisition, Horizontal Mergers, Vertical & Conglomerate Mergers, Financial Analysis.
Abstract:
After globalization, an upsurge in Merger & Acquisition (M&A) activities has been observed all over the globe especially in last decade, as same contributed towards the economic wellbeing of any country. Companies adopted different Integration Strategies (Vertical, Horizontal & Conglomerate) to undergo the merger deals and accordingly their post merger financial performance analysis was documented for future reference. On the contrary, comparatively inadequate evidence is accessible to appreciate the outcome of this activity in Pakistan, which cannot be taken as reference for future M&A deals. Therefore, the present research investigate in a decent way the impact of various M&A Integration Strategies on the financial performance of the merged firms in Pakistan, with an aim to identify the best suited M&A Integration Strategy in own environment. Available data from pre and post merger financial Statements of 36 merger events categorized broadly into three Integration Strategies (year
2000 to 2010) had been examined using paired sample T-test for difference of means of ratio categorized on four basis i.e. Liquidity Ratio, Profitability Ratio, Operating Expense Ratio & Financial Leverage Ratio. Plausible recommendations were solicited for the benefit of the investors, financial analysts, advisory firms and investment banks.
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