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Mergers and Acquisitions have long been an important element of corporate strategy. There has been a significant body of literature analyzing the success of this popular corporate strategy- Mergers and Acquisitions. The motivation behind the study - evaluating the performance of a Merger or Acquisition - is to understand, whether the perceived benefits from such a Corporate Restructuring have accrued or not to the corporates involved. There are several methodologies that could be adopted in measuring performance; the predominant however being Stock market based measures. The use of Stock market based measures to assess the performance of Mergers and Acquisitions is well justified, as it is the only direct measure of shareholder value. For a firm, characterized by the objective of Shareholder wealth maximization, the appropriate test for the success of a Merger/ Acquisition would be its effect on stock prices. The increase in the equity value of the acquiring firm in the wake of a successful merger is also adequate evidence for the synergy theory/ hypothesis of Mergers & Acquisitions.

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Dr.Nirmala Joseph is a Ph.D. in Finance from Madras University, Chennai. She is currently working as Vice Principal and also teaching faculty of St.Joseph´s College of Commerce (Autonomous), Bangalore since 2004. She is also a Corporate Consultant and has helped corporates to implement financial programmes.

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