Dissertation

This is the first section of the dissertation which would be on Introduction and would

contain brief elements about the dissertation which is carried out. The focus of the

section would be to highlight about the focus of the dissertation along with its aims

and objectives.

1.1 Introduction

In today’s market the main objective of the firm is to make profits and create

shareholder wealth. Growth can be achieved by introducing new products and

services or by expanding with its present operations on its existing products. Internal

growth can be achieved by introducing new products however external growth can be

achieved by entering into mergers and acquisitions (Ghosh and Das, 2003). Mergers

and acquisitions as an external growth strategy has gained spurt because of increased

deregulation, privatization, globalization and liberalization adopted by several

countries the world over. Mergers and acquisitions have become an important

medium to expand product portfolios, enter new markets, and acquire technology,

gain access to research and development and gain access to resources which would

enable the company to compete on a global scale (Yadav and Kumar, 2005). However

there have been instances where mergers and acquisitions are been entered into for

non value maximizing reasons i.e. to just build the company’s profile and prestige

(Malatesta, 1983; Roll, 1986).

Consolidation in the form of mergers and acquisitions has been witnessed around the

world in almost all the industries ranging from automobile, banking, aviation, oil and

gas to telecom. Some of the biggest mergers in automobile like Daimler-Benz and

Chrysler, airlines Air France and KLM and telecom SBC and AT&T are the ones

which the world can never forget. Lot of research and investigation has gone both in

the field of economics and strategic management on the kind of benefits which are

derived out of mergers to both the acquiring and target company, the customers and

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