A Study on Long-Term Impact of Mergers and Ac...

A Study on Long-Term Impact of Mergers and Acquisitions on Acquirers’’ Shareholders Systematic Risk with Reference to Healthcare Sector in India: A Comprehensive Analysis

Author Name : Mr. Akhil V Shetty, Dr. Manisha Khaladkar

ABSTRACT

In the extremely competitive corporate environment of today, mergers and acquisitions (M&A) have become more crucial for attaining inorganic growth. In particular, the healthcare industry's M&A patterns will be looked at in this article. M&A is viewed as a growth strategy, but organizations must perform well after the transaction to demonstrate their success. Despite an abundance of research, there is no conclusive proof that M&A impacts shareholders' wealth. The current study seeks to evaluate the effect of M&A deal announcement on the Acquiror's long-term shareholders' wealth of 56 M&A deals selected from the Indian healthcare sector using the Refinitiv Database for the years 2009 to 2019. According to the analysis, systemic risk (beta) of acquiring companies has increased since M&A. additionally, the number of M&A transactions has significantly increased recently, and M&A-related regulations have changed. Analyzing the trend in merger and acquisition as well as the effect of M&A on the systematic risk of the acquiring firm is crucial. With the aid of paired sample t-test statistical techniques, the study assesses the long-term shareholders' wealth primarily using actual share price return and market models for Indian healthcare sector companies.

Keywords: Acquisitions, Healthcare Sector, Mergers, Systematic Risk.