The Impact of Mergers and Acquisition Transaction on the Stock Performance in India
Every economy has their strength and weakness. Three major economies in the world namely US economy, Russian economy and Asian economy had also seen recession problems. some economy recover with some systematic strategy but some are not. due to this the company operating within the country and oversea companies need to face the trouble. in this dilemma some manage their operation but some failed. some enter into mergers and acquisitions to survive in the market. recently in India. the economy has witnessed outstanding activity in mergers and acquisition. this is proving that even Indian economy is also facing problems , and companies are preferring to enter into merger to survive their business.
From 2010 to December 2015 end , National Stock Exchange and Bombay stock has witnessed 101 mergers which has impacted their stock price either positively or negatively. Merger and acquisition has been done with the intention to survive in the market. but this intention does not cover the risk of downward of wealth of the investors who had already invested in this kind of the company. these companies are from various sectors like Power, Banking , infrastructure , auto mobile and auto ancillary, even some are from media sector too. If it is infrastructure sector, power, auto sectors then it is question of survival but if it is banking sector then merger has some other intention.