Indian enterprises were subjected to strict control regime
before 1990s. This has led to haphazard growth of Indian corporate
enterprises during that period. The reforms process initiated by
the Government since 1991, has influenced the functioning and
governance of Indian enterprises which has resulted in adoption of
different growth and expansion strategies by the corporate
enterprises. In that process, mergers and acquisitions (M&As)
have become a common phenomenon. M&As are not new in the Indian
economy. In the past also, companies have used M&As to grow and
now, Indian corporate enterprises are refocusing in the lines of
core competence, market share, global competitiveness and
consolidation. This process of refocusing has further been hastened
by the arrival of foreign competitors. In this backdrop, Indian
corporate enterprises have undertaken restructuring exercises
primarily through M & A s to create a formidable presence and
expand in their core areas of interest.
Mergers and Acquisitions in India
Mergers & Acquisitions have played an important role in the
transformation of the industrial sector of India since the Second
World War period. The economic and political conditions during the
Second World War and postwar periods (including several years after
independence) gave rise to a spate of M&As. The inflationary
situation during the wartime enabled many Indian businessmen to
amass income by way of high profits and dividends and black money
(Kothari 1967). This led to wholesale infiltration of businessmen
in industry during war period giving rise to hectic activity in
stock exchanges. There was a craze to acquire control over
industrial units in spite of swollen prices of shares. The practice
of cornering shares in the open market and trafficking of managing
agency rights with a view to acquiring control over the management
of established and reputed companies had come prominently to light.
The net effect of these two practices, viz of acquiring control
over ownership of companies and of acquiring control over managing
agencies, was that large number of concerns passed into the hands
of prominent industrial houses of the country (Kothari, 1967). As
it became clear that India would be gaining independence, British
managing agency houses gradually liquidated their holdings at
fabulous prices offered by Indian Business community. Besides, the
transfer of managing agencies, there were a large number of cases
of transfer of interests in individual industrial units from
British to Indian hands. Further at that time, it used to be the
fashion to obtain control of insurance companies for the purpose of
utilising their funds to acquire substantial holdings in other
companies. The big industrialists also floated banks and investment
companies for furtherance of the objective of acquiring control
over established concerns. The post-war period is regarded as an
era of M&As. Large number of M&As occurred in industries
like jute, cotton textiles, sugar, insurance, banking, electricity
and tea plantation. It has been found that, although there were a
large number of M&As in the early post independence period, the
anti-big government policies and regulations of the 1960s and 1970s
seriously deterred M&As. This does not, of course, mean that
M&As were uncommon during the controlled regime. The deterrent
was mostly to horizontal combinations which, result in
concentration of economic power to the common detriment. However,
there were many conglomerate combinations. In some cases, even the
Government encouraged M&As; especially for sick units. Further,
the formation of the Life Insurance Corporation and nationalization
of the life insurance business in 1956 resulted in the takeover of
243 insurance companies. There was a similar development in the
general insurance business. The national textiles corporation (NTC)
took over a large number of sick textiles units (Kar 2004). .
Recent Development in Mergers and Acquisitions The functional
importance of M&As is undergoing a sea change since
liberalisation in India. The MRTP Act and other legislations have
been amended paving way for large business groups and foreign
companies to resort to the M&A route for growth. Further The
SEBI (Substantial Acquisition of Shares and Take over) Regulations,
1994 and 1997, have been notified. The decision of the Government
to allow companies to buy back their shares through the
promulgation of buy back ordinance, all these developments, have
influenced the market for corporate control in India. M&As as a
strategy employed by several corporate groups like R.P. Goenka,
Vijay Mallya and Manu Chhabria for growth and expansion of the
empire in India in the eighties. Some of the companies taken over
by RPG group included Dunlop, Ceat, Philips Carbon Black,
Gramaphone India. Mallyas United Breweries (UB) group was straddled
mostly by M&As. Further, in the post liberalization period, the
giant Hindustan Lever Limited has employed M&A as an important
growth strategy. The Ajay Piramal group has almost entirely been
built up by M&As. The south based, Murugappa group built an
empire by employing M&A as a strategy. Some of the companies
acquired by Murugappa group includes, EID Parry, Coromondol
Fertilizers, Bharat Pulverising Mills, Sterling Abrasives, Cut Fast
Abrasives etc. Other companies and groups whose growth has been
contributed by M&As include Ranbaxy Laboratories Limited and
Sun Pharmaceuticals Industries particularly during the later half
of the 1990s. During this decade, there has been plethora of
M&As happening in every sector of Indian industry. Even, the
known and big industrial houses of India, like Reliance Group, Tata
Group and Birla group have engaged in several big deals.Research
Issues & Objectives
As a result of Indian economic liberalization, and rapidly
changing business environment, there has been a spurt in the
M&As in India. This gives rise to certain issues in the sphere
of mergers and acquisitions which need to be investigated. Is there
a sudden spurt in M&A activities in India in the 1990s? Is it
the process of deregulation which has hastened M&A activities
or there are some other reasons? Is there some visible trend of
M&As in the different sectors of the Indian industry? Has the
M&A strategies resorted by Indian enterprises affected their
performances? Is it being used as a survival strategy by Indian
enterprises in view of the growing presence of foreign enterprises
in the post 1991 period? Do the shareholders benefit from
M&As?
TATA & CORUS: A Case of Acquisition
ABSTRACT Merger and Acquisition have became exclusive trend in
steel industry globally since the beginning of the 21st century.
Corporate integration in the corporate world is accomplishing
significance and concentration especially with an exciting
undertaking of intense globalization. This is the clear evidence
from the importance and increasing growth of deal values and
resulted with more corporate integration in recent times. These
studies examine the key motive drivers and evaluate the impact of
mergers and acquisition in steel industry on event study approach.
This event study focused on Tata steel Corus Acquisition during the
year 2007. The study used a published financial statement which
consists of secondary data. The financial statements are analysed
and tested by using correlation co-efficient and t- test. The
outcome of the analysis disclosed that there is a significant
difference between pre post merger and acquisition in capital base
and level of returns. There is a significant difference between pre
post merger and acquisition EPS. The finding of this study evolves
those synergies, increased capitalization with the proof of changes
in returns, profitability based on the research findings. It can be
summarized that the corporate integration has increase the
organizational performance also contributed to the growth of the
steel industry
There are not many opportunities for producers in emerging
low-cost markets to gainaccess to the markets of Europe other than
by acquiring a company like Corus,John Quigley (Editor, Industry
Publication Steel week) Tata being the winner. As driven by slow
growth and substantial profits in the steel industry. Corus asset
sale may lift the Tata steel earnings. Tata steel had acquired
British largest steel maker Corus for 608 pence per share. It is
one of the striking acquisition in 2006, to propose Tata steel from
the 56th to the 6th largest steel maker in the world. A long term
gap between their delivered performance of the firm and the
strategic plan projected gap was in terms of size, sales and
Income. Acquisition could fill the gap (J Fred Weston and Samuel C.
Weaver 2002). However, companies can seek for genuine synergies
through financial engineering. Figure: 1 outbound acquisition
since2005.
Thousands of Indians didnt offer prayers for Tata Steel to
clinch the deal for the Anglo-Dutch steel maker Corus, as they have
for the recovery of hospitalized Bollywood superstars. Nor did they
erect 40-foot billboards of a smiling Ratan Tata, chairman of Tata
Steel, after he won Corus. And the stock markets were clearly
concerned about the Tata Steels new debt load. But despite all
this, euphoria gripped the nation. Finance minister P. Chidambaram
offered unspecified help, if needed, to close the deal; fellow
steel magnate Lakshmi Niwas Mittal cheered the acquisition, and
excited TVnewsreaders gushed. Indias first Fortune 500 MNC was
born. Tata acquired Corus, which is four times larger than its size
and the largest steel producerin the U.K. The deal, which creates
the world's fifth-largest steelmaker, is India's largestever
foreign takeover and follows Mittal Steel's $31 billion acquisition
of rival Arcelor inthe same year. Over the past five years, Indian
companies had made global acquisitions for over $10 billion. The
Tata bid almost equals this amount. Most of them have averaged $100
to 200 million."It is a two-way street now," Kamal Nath (Commerce
Minister, India) said."Not only India is seeking foreign
investment, but Indian companies areemerging investors in other
countries." Ratan Tata has said he is confident the two companies
have a cultural fit andsimilar work practices. Nearly 30 years ago
J.R.D Tata had lured away a young engineer from Coruss predecessor
company, British Steel, to work at Tata Steel. That young
Sheffield-educated engineer Sir Jamshed J. Irani (knighted by the
Queen 10 years ago) was Tata Steels managing director until six
years ago. Until the 1990s, not many Indian companies had
contemplated spreading their wings abroad. An Indian corporate or
group company acquiring a business in Europe or the U.K. seemed
possible only in the realm of fantasy. Recent reports of United
NationsConference on Trade and Development (UNCTAD) and other
organizations have recorded the fact that nowadays Foreign Direct
Investment (FDI) is more likely to flow in through cross border
mergers (and not through Greenfield Projects). Though Corus isfour
times bigger than Tata but in the year 2006 the operating profit
for Tata was $840million, whereas in case of Corus it was $860
million. There are some major inputs,which leads Tata towards this
huge profit.
Figure 1
Tata acquired Corus on the 2nd of April 2007 for a price of $12
billion making the Indian company the worlds fifth largest steel
producer. This acquisition process has started long back in the
year 2005. However, Corus was involved in a considerable number of
Merger & Acquisition (M&A) deals and joint ventures (JVs)
before Tata. This process started in the year 2000 and with Tata it
came to an end. In a period of seven years Corus was involved in 14
deals apart from Tata. (Refer Exhibit 1 for the details about
M&A deals by Corus). In 2005, when the deal was started the
price per share was 455 pence. But during the time of acquisition
held in 2007, the price per share was 608 pence, which is 33.6%
higher than the first offer. For this deal Tata has financed only
$4 billion, although the total price of this deal was $12billion.
Here the important point is how Tata could manage to get such a
huge amount for this deal? Did Tata Steel overheat in its zeal to
win Corus? However as stated by Muthuraman (the Managing Director
of Tata Steel), thebid made to Corus was unanimously supported by
the management of the company and recommended to its shareholders.
In an interview to CNBC India, B Muthuraman also said that they are
acquiring Corus for synergy and not for tonnage. "There are
synergies in operations, manufacturing, marketing etc."
The merger of Tata steel and Corus will result to a saving of
$400 million to the company after 3 years of corporate integration.
Long term strategy Strong base in India De integrated manufacturing
Technology advantage Economies of scale To enter European mature
market Cost of acquisition is less than setting up a new industry
Acquiring the holding of Corus through patents and R & D
facilities
The main reasons for Corus to be sold Increase in cost of
production Corus revenue was $18.06 billion, profit was only just
$626 million but incase of Tata , the total revenue is $4.84
billion and profit was $824 million Target with low cost high
quality raw material from India. A chance to bailout of debt and
financial distress
Tata An Indian Steel Industry Tata Steel has established by
Indian Parsi Businessman Jamsetji Tata in 1907, exactly in the year
when British American Tobacco (BAT) has started its first factory
in India. But it started operating in the year 1912. Tata Steel
holds a very vital place in Indian business history, because it has
introduced some of the unique concepts like 8-hour working days,
leave with pay and pension system for the first time in India and
the first player to start rapid industrialization process. In the
later part the concepts invented and implemented by Tata became
lawful and compulsory practice for the Indian employees. From Tata
Steel, Tata has started investing in various other businesses like;
Oil mills, Airlines, Publishing, Motors, Consultancy services etc
in a short span of 30 years. In the year 1945 Tata entered into tea
business by the name of Tata Tea, which was called as Tata Finlay
earlier. Tata also entered into exports as Tata Exports, which is
the most successful and the largest export house in India. During
the entire business in India Tata has seen many ups and downs, in
different fields of business. If we will look at the companys
financial status/condition, it will give some idea about the
condition and performance of the company across the years. (Refer
Exhibit 2, 3 & 4 for the detail about the companys performance
from 1997-2006)
The Indian Steel industry is regarded as the most important
component for thedevelopment of nation, because steel industry
(heavy industry) is considered as a veryimportant and influential
parameter for the development of any modern economy. Thefinished
steel production in India has grown from 1.1 million tones in 1951
to 31.63million tones in 2001-02, which can be regarded as a
remarkable example of Indiasdevelopment in economic activities.
Tata played a vital role in the improvement of steelproduction
also. For that reason in the development of Indias economy, Tata
played asignificant role. As a result the consumption level of
steel from 1990 to 2002 wascontinuously in an increasing order, but
in 2003 it was not like earlier. In respect to theper capita income
and consumption of steel it is very less in India with compare to
othercountries. (Refer Exhibit 5 for the details about steel
consumption level) Indias major market for steel and steel items
include USA, Canada, Indonesia, Italy,West Asia, Nepal, Taiwan,
Thailand, Japan, Sri Lanka and Belgium. The major steelitems of
export include HR coils, plates, CR and galvanized products, pipes,
stainlesssteel, wire rods and wires. With the fall in prices along
with depressed domestic demand,India has been increasing exports to
overcome the excess supply situation. This hasresulted in
antidumping actions being taken by developed countries like USA, EU
andCanada. The trade action by some countries against Indian steel
industry has, to someextent, affected Indias exports to these
countries. The Government of India and theIndian steel producers
are trying to combat such actions despite such efforts being
veryexpensive and involving time-consuming procedures. (Refer
Exhibit 6 for the detailedabout steel production by Tata in
India)
Global Steel Industry In global steel industry the consumption
of steel has been decreased drastically in 2007, in comparison to
2006. According to International Iron and Steel Institute (IISI)
till 2010 the average demand for steel would be 4.9 per cent per
year. But during 2010 and 2015 the growth is expected to be 4.2 per
cent. In fact IISI forecasts the global steel demand would be 1.32
billion tones by 2010 and 1.62 billion tones by 2015. Much of this
demand growth is expected to be generated from countries like China
and India. Among the major steel producing countries the production
of steel has increased from 2005-2006 except Brazil. China is the
highest steel producing country in the world with a production of
355.8 million tones in 2005 and 418.8 million tones in 2006. And
for this increasingdemand of steel market it is not possible for a
single company to capture the marketalone. In that production
process Tata may play a vital role. For that reason IISI isgiving
its opinion in favor of Tata.
Corus and Steel Production in the U.K Corus Group plc was formed
on 6th October 1999, through the merger of two companies, British
Steel and Koninklijke Hoogovens, following the privatization of
many steelworks companies by the U.K. government. The company
consists of four divisions which include: Strip Products, Long
Products, Aluminum and Distribution and BuildingSystems. With
headquarters in London, Corus operates as an international
company,satisfying the demand of many steel customers worldwide.
Its core business comprises ofmanufacturing, development and
allocation of steel and aluminum products and services.The company
has a wide variety of products and services which comprise of
themanufacturing of electrical steel, narrow strip, plates,
packaging steel, plated steel strip,semi finished steel, tube
products, wire rod and rail products and services. However,
thecompany is also engaged in providing a variety of services
including design, technologyand consultancy services.
Corus products and services are acquired by customers from
diverse fields such ascommercial and military aerospace ventures,
the automotive, construction, engineering,defense and security, as
well as the rail and shipbuilding industry. In terms ofperformance,
the company is regarded as the largest steel producer in the UK
with10,142 million of annual revenue (for 2005) and a work force of
50 000 employees. Inorder to sustain and run its global
steelmaking, processing and distribution operations thecompany
makes annual investments of over 6 million for the purchase of
various goodsand services, such as iron ore and coal, alloys,
refractory, rolls and paint. Looking at thefinancial status of the
company from 1996-2005, a degree of fluctuation between theyears
can be seen. But irrespective of all these factors Corus continue
the business as itwas continuing. (Refer Exhibit 9 & 10 for the
details of financial performance of thecompany across the years)
The Deal The deal (between Tata & Corus) was officially
announced on April 2nd, 2007 at a priceof 608 pence per ordinary
share in cash. This deal is a 100% acquisition and the newentity
will be run by one of Tatas steel subsidiaries. As stated by Tata,
the initial motive behind the completion of the deal was not Corus
revenue size, but rather its marketvalue. Even though Corus is
larger in size compared to Tata, the company was valued less than
Tata at the time when the deal negotiations started. But from Corus
point of view, as the management has stated that the basic reason
forsupporting this deal were the expected synergies between the two
entities. Corus hassupported the Tata acquisition due to different
motives. However, with the Tataacquisition Corus has gained a great
and profitable opportunity to make an exit as thecompany has been
looking out for a potential buyer for quite some time. The total
value of this acquisition amounted to 6.2 billion (US$12 billion).
Tata Steel the winner of the auction for Corus declares a bid of
608 pence per share surpassed the final bid from Brazilian Steel
maker Companhia Siderurgica Nacional (CSN) of 603pence per share.
Prior to the beginning of the deal negotiations, both Tata Steel
and Coruswere interested in entering into an M&A deal due to
several reasons. The official pressrelease issued by both the
company states that the combined entity will have a pro formacrude
steel production of 27 million tones in 2007, with 84,000 employees
across fourcontinents and a joint presence in 45 countries, which
makes it a serious rival to othersteel giants. The official
declaration of the completed transaction between the two companies
was announced to be effective by Court of Justice in England and
Wales and consistent with the Scheme of Arrangement of the Tata
Steel Scheme on April 2, 2007. According the Scheme regulations,
Tata Steel is required to deliver a consideration not later than 2
weeks following the official date of the completion of the
transaction.
The process has started on September 20, 2006 and completed on
July 2, 2007. In theprocess both the companies have faced many ups
and downs. The details of this processhas described below.
September 20, 2006 : Corus Steel has decided to acquire a
strategic partnership a Company that is a low cost producer
October 5, 2006The Indian steel giant, Tata Steel wants to
fulfill its ambition toExpand its business further
October 17, 2006The initial offer from Tata Steel is considered
to be too low bothby Corus and analysts Tata Steel has kept its
offer to 455p per share.
October 18, 2006Tata still doesnt react to Corus and its bid
price remains thesame
October 20, 2006: Corus accepts terms of 4.3 billion takeover
bid from Tata Steel
October 23, 2006 :The Brazilian Steel Group CSN recruits a
leading investmentbank to offer advice on possible counter-offer to
Tata Steels bid.
October 27, 2006Corus is criticized by the chairman of JCB, Sir
AnthonyBamford, for its decision to accept an offer from Tata
November 3, 2006The Russian steel giant Severstal announces
officially that it willnot make a bid for Corus
December 18, 2006 :Within hours of Tata Steel increasing its
original bid for Corus to500 pence per share, Brazil's CSN made its
formal counter bid forCorus at 515 pence per share in cash, 3% more
than Tata Steel'sOffer.
January 31, 2007: Britain's Takeover Panel announces in an
e-mailed statement thatafter an auction Tata Steel had agreed to
offer Corus investors608 pence per share in cash
April 2, 2007 : Tata Steel manages to win the acquisition to CSN
and has the fullvoting support form Corus shareholders
:.
Post Acquisition Tata Tata Steel has formed a seven-member
integration committee to spearhead its union with Corus group.
While Ratan Tata, chairman of the Tata group, heads the committee,
three of the members are from Tata Steel and the other three are
from Corus group. Members of the integration committee from Tata
Steel include managing director B Muthuraman, deputy managing
director (steel) T Mukherjee, and chief financial officer Kaushik
Chatterjee. The Corus group is represented in the committee by CEO
Phillipe Varin, executive director (finance) David Lloyd, and
division director (strip products) Rauke Henstra.The acquisition by
Tata amounted to a total of 608 pence per ordinary share or
6.2billion (US $12 billion) which was paid in cash. First of all,
the general assumption is thatthe acquisition was not cheap for
Tata. The price that they paid represents a very high49% premium
over the closing mid market share price of Corus on 4 October, 2006
and apremium of over 68% over the average closing market share
price over the twelve monthperiod. Moreover, since the deal was
paid for in cash automatically makes it moreexpensive, implying a
cash outflow from Tata Steel in the amount of 1.84 billion.Tata has
reportedly financed only $4 billion of the Corus purchase from
internal companyresources, meaning that more than two-thirds of the
deal has had to be financed throughloans from major banks. The day
after the acquisition was officially announced, TataSteels share
fell by 10.7 percent on the Bombay stock market. Despite its four
timessmaller size and smaller capacity, Tata Steels operating
profit for 2006, earning $840million on sales of 5.3 million tones,
were very close in amount to those generated byCorus ($860 million
in profits on sales of 18.6 million tons).Tatas new debt amounting
to $8 billion due to the acquisition, financed with Corus cash
flows, is expected to generate up to $640 million in annual
interest charges (8% annual interest cost). This amount combined
with Corus existing interest debt charges of $400 million on an
annual basis implies that the combined entitys interest obligation
will amount to approximately $725 million after the acquisition.The
debate whether Tata Steel has overpaid for acquiring Corus is most
likely to becertain, since just based on the numbers alone it turns
out that at the end of the biddingconflict with CSN Tata ended up
paying approximately 68% above the average price ofCorusshares.
Another pressing issue resulting for this deal that has created a
dilemmabetween experts and analysts opinions is whether this
acquisition for the right move forTata Steel in the first place.
The fact that Tata has managed to acquire a British steelmaker that
has been a symbol of Britains industrial power and at the same time
itsdominion over India has been perceived as quite ironic. Only
time will show whetherTata will be able to truly benefit from the
many expected synergies for the deal and notmake the typical
mistakes made in many large M&A deal during this beginning
period. I believe this will be the first step in showing that
Indian industry can in fact step outside the shores of India in an
international marketplace and acquit itself as a global player.
Ratan Tata
Questions:1. Why Corus went in for this deal?2. Was Tata wise in
this decision?3. Who worked out the financial deal?4. How could the
finances be organized in?5. How should be assets be evaluated
before an acquisition?1
To a large extent, corporate integration is based on a belief
that earnings accrued through reduction cost, increase market
share, reduction in earning volatility, and sale of economies.
However, the main features of the compassionate of reforms
inductive mergers and acquisitions of Tata and Corus industry
creates potential of realizing efficient gains The total value of
the Tata Corus acquisition amounted to 6.2 billion (US $ 12
billion). Tata steel declares a bid of 608 pence per share to go
beyond the final bid from Brazilian steel maker Compuhia
siderurgica Nacional (CSN) of 603 pence per share. Proceeding of
the deal negotiations, both the Tata and Corus were interested to
create a corporate bondage by entering into an merger and
acquisition deal due to the diversified reasons.
Figure 2
RESEARCH METHODOLOGY The approach for examination of value
creation of both bidder and target around the announcement of an
offer and includes both successful and unsuccessful merger and
acquisition. The three hypothesized statements tested using
correlation co-efficient and T- test. Hypothesis Based on the
research gap areas from literature review, the following hypothesis
is tested. H0: there is no significant difference between pre
merger and acquisition equity capital base and Profit after Tax.
H0: there is no significant difference between post merger and
acquisition equity capital base and Profit after Tax. H0: there is
no significant difference between pre and post merger and
acquisition earning per share
Source: The Indian Ministry of Steel (the number in brackets
indicate the percentage increase fromthe previous year).Note: The
consumption of steel is arrived at by subtracting export of steel
from the total of domesticproduction and adding the import of steel
in the country
Conclusions and Future Research Dimensions The trend analysis
has substantiated the fact that Indian companies have adopted
M&As as a strategic choice for growth and expansion in general
and particularly more prominently during the difficult period of
1996-97 and 1997-98. The analysis of M&As trends for the entire
period gives two distinct phases of M&As for the different
sectors of the Indian industry, that is the period from 1990-91 to
1995-96 and 1996-97 to 2000-01. During the first period, there have
been 68 M&As where as in the second phase 1318 M&As have
been found. That is why the second phase can safely be called as
the first M&A wave in India. M&As have been found to be
beneficial in the sense that Indian companies grew in size, and
attain better market share which is substantiated by empirical
analysis. Throughout the period of study, turnover increased after
the companies experienced an M&A. Profit after tax and book
value of the companies increased after M&As during the time
periods 1994-98 and 1994-99 respectively. After that there was no
significant change of M&As on these variables. Further,
M&As did not have any impact on return on net worth for the
period of study. The nature and pattern of M&As strategies
adopted by the Indian companies reveal mostly horizontal and
vertical types. This gives strength to the argument that Indian
companies are focusing on their core areas and expanding mostly in
related areas of strength which is helpful in realization of
synergistic benefits. Further, it has been observed that M&As
in India are strategic in nature that motives range from growth and
expansion to high quality of human resources, strong brand presence
and global identity and leadership. The study has ignored the
impact on target companies due to the typical constraints of
obtaining Indian M&As data as stated in the study. Further,
there are possible differences in the accounting methods adopted by
different companies in the sample which is also ignored. The study
has also not used any control groups for the comparison (industry
average or firms with similar characteristics) as has been found in
other studies. A bigger sample covering a longer time period would
have given better results and the authors plan to extend the work
further. Future research could be directed in the areas of impact
of mergers and acquisitions on corporate performance by taking
total factor productivity measures for empirical investigations.
This could be accomplished by measuring improvement in the total
factor productivity compared to the industry average at any point
of time or productivity trends before and after ownership change
over a period of time