Merger Performance: The Marriage between SAIL and MEL

Amity Management Review, June-December 2012, Vol. 2, Issue 2, pp. 69-79

12 Pages Posted: 22 Feb 2018

See all articles by N M Leepsa

N M Leepsa

Arizona State University @Lake Havasu

Date Written: 2012

Abstract

The purpose of the study is to analyze the financial performance of Steel Authority of India Ltd (SAIL) after merger deal with MEL. The financial statements are analyzed for pre and post-merger five years (2000-2010) by using seven financial ratios. The accounting approach uses accounting measures and productivity measures of financial statements to evaluate the M&A success. In spite of creation limitations, accounting ratios are considered as reliable and convenient for making analysis since financial statements are audited. Ratio analysis is employed as is considered as a convenient technique to make a quantitative analysis of companies’ performance. The results show that the financial performance of SAIL in terms of profitability, liquidity, and solvency has improved after the merger. It indicates that merger deals improve the financial performance of companies. The limitation of the study is that it only focused on the financial aspect of the merger but ignores which factor have impacted the deal’s success and failure. A study can be made by controlling factors affecting steel industries. It would enable the organizations to have a choice between organic and inorganic growth strategy. Case-based research on pre and post-merger on steel companies is made which is few as far as knowledge is concerned. This paper is an attempt to look into a specific deal by which it would make deep understanding of merger performance in India.

Keywords: Merger Acquisition

Suggested Citation

Nabaghan Madhabika, Leepsa, Merger Performance: The Marriage between SAIL and MEL (2012). Amity Management Review, June-December 2012, Vol. 2, Issue 2, pp. 69-79. Available at SSRN: https://ssrn.com/abstract=3127258

Leepsa Nabaghan Madhabika (Contact Author)

Arizona State University @Lake Havasu ( email )

Palo Verde E101
University Way 100
Lake Havasu City, AZ
United States
9288549739 (Phone)

HOME PAGE: http://https://havasu.asu.edu/

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