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The Economics and Finance Letters

December 2021, Volume 8, 2, pp 130-141

Analysis of Synergies in Indian Corporate M&A Deals: A Logit Regression Approach

Anjala Kalsie


Neha Singh

Anjala Kalsie 1
Neha Singh 2

  1. Associate Professor, Faculty of Management Studies University of Delhi, Delhi, India. 1

  2. Research Scholar Faculty of Management Studies University of Delhi, Delhi, India. 2

on Google Scholar
on PubMed

Pages: 130-141

DOI: 10.18488/journal.29.2021.82.130.141

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Article History:

Received: 05 February, 2021
Revised: 10 March, 2021
Accepted: 02 April, 2021
Published: 26 April, 2021


A firm's financial attributes play an essential part in the merger decision. The present paper attempts to improve the existing literature on assessing M&A activity in Indian corporate. The primary objective is to analyse 1) When synergies are gained, payment is made in cash, 2) When synergies are gained, M&A activity takes place in the related industries. The paper has analysed 20 major M&A deals which took place between 2010 and 2015 for the Indian Corporates. The data includes three year pre-merger , year of merger and three year post merger i.e. a total of seven year data for each deal has been used in the study effectively from 2007 to 2018. Random Effect Logit Regression has been applied to estimate the relationship. The major results derived from the analysis suggest that EBITDA has statistically significant relation with payment dummy as well as Industry relatedness. Statistically significant results have also been observed for Free Cash flow. Asset Turnover has also shown to have a significant relationship with relatedness of industry in our model. The results supports both the hypothesis of the study i.e. “When synergies are gained, cash mode of payment is preferred.” and “When synergies are gained, mergers & acquisition in related industry sector are preferred”.
Contribution/ Originality
This study is one of the very few studies which have investigated how the mode of payment in Merger and Acquisition(M&A) strategy is impacted by the synergies gained in the major M&A deals for Indian Corporates over the period from 2010 to 2015.


M&A activity, Synergies, Indian corporates, Logit regression analysis, Cash deals, Industry relatedness.


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This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.


Both authors contributed equally to the conception and design of the study.

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