Examination of Pre- and Post-Merger Scenarios : Evidence from Pakistani Companies

Abstract

Acquisitions remain the main strategic tool for corporation growth in world as compared to Pakistan; in last 5 years there can be found more than 250 Acquisitions as compared to merely few M&A 15 years back although their unique strength to create shareholder wealth remains questionable. The purpose of the research is investigate if Pre and Post Acquisitions practices and the linkages with other departments (Marketing and human resource) for short run and long run changes. The research will explore a merging tread in Pakistan weather the acquisition of local companies by bigger firm gains more profit or else the local companies that are acquired by foreign and international companies generate more income. The research will also look into stability of the investment for shareholder perspective in terms of earnings per share, price to earnings and also the growth in market share after M&A. The group 1includes Lucky cement by acquiring ICI, GSK Pakistan, Orix Bank and orix investments , Khushali Bank acquired by UBL comparing it with the group 2 which are them self local companies listed in KSE by are acquired by Non listed or foreign listed companies. For instance Telenor acquisition of Tameer Bank, tamer bank its self is KSE listed by is acquired by foreign listed company of Europe expanding its operations in Pakistan. Others in this group contain U-Bank acquired Rozgar microfinance bank, Metlife Global Acquisition of American life Insurance and Pakistan International Container Terminal acquired by a International Container Terminal Services, Inc. (ICTSI). The purpose of this research is try to find difference when a local firm acquires a smaller company versus a foreign or non listed company acquires a local smaller company to expand their production, profit or markets share. The key performance indicators like age of company, local popularity, and nature of business / industry will also be disuses and their impact on performance.