ZENITH International Journal of Business Economics & Management Research
Year : 2014, Volume : 4, Issue : 12
First page : ( 72) Last page : ( 81)
Online ISSN : 2249-8826.

Impact of merger on shareholder value-a study on select banks

Dr. (Mrs.) Santhiyavalli G.*, Abirami K.**

*Professor of Commerce, Avinashilingam Institute for home Science, and Higher Education for Women, Coimbatore

**Research Scholar, Dept of Commerce, Avinashilingam Institute for home Science, and Higher Education for Women, Coimbatore

Online published on 28 January, 2015.

Abstract

Mergers and acquisitions in the Indian banking industry are the revolution strategies adopted to restructure the banking sector in the recent years. These were done to improve the shareholder value through expansion of the business. The study is an effort to analyses the change in shareholder value before and after merger of the select banks. The financial parameters used in the study to analyse the shareholder value through economic value added tool are net operating profit after tax and cost of capital employed in the banking business in the select banks. The study covers five scheduled commercial banks which were involved in acquisition of other banks during 2006–07 to 2010–11. Required data were collected from the capitaline plus database. It was found that the post merger, there is increase in the economic value added of the banks under the study.

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Keywords

Banks, merger strategy, economic value added shareholder value.

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