GSMC 2014

Global Summit on
Management Cases

SYNERGIC ADVANTAGES OF MERGERS &

ACQUISITIONS - A CASE STUDY ON PRIVATE
SECTOR BANKS IN INDIA*
ABSTRACT
Synergies are the soul of mergers and acquisitions in any of the industry/sector. Therefore, the
two entities planning for mergers and acquisitions lay significant importance to this aspect. The
effective results are realized and desired goals are achieved once expected synergies are
consummated on time. Since, the contribution of private sector banks in the growth process
has emerged extensively in Indian banking scenario, their strengths in terms of operational
advantages play an important role. This has resulted in many mergers of private sector banks in
the recent past. The case is about voluntary merger of private sector banks which will determine
underlying motives and expected synergies existing before the merger and proportion of synergies
realized after the merger over a period of time. For the purpose of construction of this case
study, synergies like, operational and revenue synergies have been considered. Subsequently, an
analysis has been undertaken to assess its impact on growth and future prospects of the merged
entity. The case study reveals that both synergies are closely related and have positive influence
on each other in achieving the desired goals and results.
Further, to make the case study more specific and to address defined objectives the pre and
post-merger performance of the case would be analysed through trend analysis on different
parameters and using SPSS tool to strengthen the case study. The case will focus on in the
changes in terms of financial performance, expansion and growth process and strengthening of
a banks market share after opting for merger. The case will also examine certain policy issues
involved in voluntary merger of banks.

Pedagogical Objectives

To analyze underlying motive and expected synergies in the voluntary merger of banks

To determine level of synergies consummated after the merger resulting in significant

achievements in the longer run

To assess time factor involved in a way to absorb the merging entity and to derive fruitful
results

To assess and analyze policy impediments in the affective merger in banks

* GSMC 2014, IIM Raipur

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