A Study on Pre Merger and Post Merger/ Acquisition (M & A) Selected Financial Parameters for Selected Cement Companies
in India
A Study on Pre Merger and Post Merger/ Acquisition
Selected Financial Parameters for Selected Cement Companies
in India
Dr. Bindiya Kunal Soni
Dr. Bindiya Kunal Soni is Associate Professor, Anand Institute of Management,
drbindiyasoni@gmail.com
Abstract
There are many strategic reasons behind
mergers and acquisitions (M & As) such
as growth, diversification, profitability etc.
All the M & As may not be successful in
achieving these objectives. How far they can
achieve the intended objectives is a matter
of research. The purpose of this paper is
to compare pre and post M & A financial
performance of acquiring companies in
Indian cement industry with the help of
various financial parameters. Key M & A
deals in cement industry during the period
of 2000 to 2013 have been considered for
the research. The performance of these
acquiring companies is being considered
on the basis of two phases i.e. pre M & A
period and post M & A period. The findings
of the study revealed that these deals have
not created any significant difference for
majority of the financial parameters of the
acquiring cement companies in India for the
study period.
Key Words
Merger, Acquisition, Consolidation, Cement
Industry, Corporate Performance, Financial
Parameters, Net worth, Capital Employed
Introduction
The corporate word is undergoing a paradigm
shift, from expansion and diversification to
ever-increasing mergers and acquisitions (M
& As). M & As have become strategic tool that
is being effectively used to increase long term
profitability, to acquire established brands and
to expand to emerging and low cost markets
(Aurora et al, 2011). The study reviews the
consolidation through M & As, in the Indian
cement industry, during the period of 2000 to
2013.
The last decade showcased a steady growth
in the Indian cement industry; broadly in line
with the economic development. Indian Cement
industry is the second largest cement industry
in the world, next only to China. It contributed
around 6% to the global cement production and
reached the market size of approximately $18 bn
in 2010. However, the last fiscal (2010) proved
to be a major testing time for the industry. The
cement manufacturers were severely affected
due to demand slowdown and rising input cost.
During the year 2011, the coal prices increased
more than 30%, power costs went up by about
20% and the rise in crude have pushed up the
transportation costs by 10% (Cement Sector
Report, 2011).
After a period of over-supply and a phase
of massive capacity additions, the industry is
3
 Dr. Bindiya Kunal Soni
currently in a consolidation phase. Small firms
are getting merged with bigger players. With
sound economic growth and infrastructure
development, the demand for cement is on an
upward trend. Further addition to capacity is
coming up to cater to the increasing demand for
cement (Kumar et al, 2013). Almost all the major
global players are entering Indian market. M &
As will be triggered by the fragmented nature
of the industry where the top players control
majority of the market share. Consolidation of
the capacities through merger and acquisition
will be the focus area for major cement players
in India as the green field projects require huge
capital investments and involve a considerable
gestation period. The cyclical nature of the
industry has meant that only large players are
able to withstand the downturn in demand
due to their economies of scale, operational
efficiencies, centrally controlled distribution
systems and geographical diversifications
(Kumar, 2011).
In this context, the study explores the
consolidation through M & As in Indian cement
industry during the year 2000 to 2013. The
study focuses upon the impact of such deals on
the financial and operating performance of the
acquiring firms during the post merger phase.
Literature Review
There are many research conducted so far in
the area of merger and acquisition. There are
mixed opinions as to whether merger creates
positive impact on the financial performance of
the acquiring companies. The following section
reviews few studies focusing upon pre and post
merger comparison of corporate performance of
the acquirer.
Ismail (2013) reviewed the available
4 SIES Journal of Management, September 2014, Vol. 10(2)
literature linking corporate performance to M
& As. He classified all these studies according
to the type of the measures used i.e. accounting
measures-based, market measures-based, mixed
measures, or qualitative measures-based. The
study concluded that the impact of mergers and
acquisitions on the financial performance of
acquiring and the acquired firms is inconclusive.
As per the findings of this study, there are
variety of factors such as method of payment,
cross-border versus domestic M & A, firm size,
macro-economic conditions and time period of
transaction that affect the outcome of M & A.
Kumara and Satyanarayana (2013) examined the
comparative difference between pre and post M
& A in terms of financial analysis for ten major
companies in India during 2010.The results
indicated a significant positive value creation
to the acquired firms. Khan (2012) studied pre
and post-merger financial performance appraisal
of acquiring banks in India through ratio
analysis. The result indicated that the post M&A
have not created difference in the financial
performance of the acquiring banks. Poornima
and Subhashini (2013) studied the impact of
mergers and acquisitions across industries in
India such as Cement, Entertainment, Finance,
Oil, Commodities, Electronics, IT, Phrma etc.
As per the findings, there was no improvement
in the financial performance of the firm due to
acquisitions irrespective of the industry.
Ahmad and Saeed (2013) studied the
profitability and risk measure if the banks
merge with the cement industries in Pakistan.
The results of this study regarding profitability
were mixed. This merger would prove more
risky for banks as compared to cement industry.
Lee and Pennings (1996) studied the effects of
resource complementarities and organizational
compatibility on M & A outcomes by analysing
A Study on Pre Merger and Post Merger/ Acquisition (M & A) Selected Financial Parameters for Selected Cement Companies in India
461 deals in Dutch accounting industry. The
study focused on organizational dissolution and
involvement in subsequent M & A. As per the
findings, compatibility was not associated with
the dissolution rate but it was strongly related
with the probability that a firm was engaged in
additional M & A.
Saboo and Gopi (2009) found that type
of acquisition (domestic Vs. Cross border)
plays an important role in the performance
of the acquiring companies. They compared
post merger performance of Indian acquiring
firms involved in domestic and cross border
acquisitions. The findings suggested that mergers
have had a positive effect on key financial
ratios of firms acquiring domestic firms while a
slightly negative impact on the firms acquiring
cross-border firms. Sharma (2013) found that
for metal industry in India, financial ratios of
sampled companies showed a marginal but not
significant improvement in case of liquidity and
leverage parameters while profitability result
showed significant decline post merger.
From the above mentioned literature review,
it may be observed that the present study is not
unique and one of its kind. There are many
studies in Indian as well as International context
linking corporate performance with merger and
acquisition with respect to variety of industries.
However, the studies in relation to pre and post
M &A comparison in relation to cement industry
in India could not be located. Hence, the present
study tries to broaden the available literature by
analysing pre and post impact of such deals on
various financial parameters for the year 2000 to
2013 for the cement industry in India.
Research Objective
• To analyse M & A deals for cement industry
in India during the period of 2000- 2013.
• To report pre and post M & A financial
performance of acquiring cement companies
in terms of parameters such as PBDIT, Net
worth, PAT, Capital employed, Debt equity
ratio etc. for the study period.
• To compare the pre and post M & A financial
performance of acquiring cement companies
in India and thereby to check the impact of
M & A on the financial performance of such
companies.
Research Methodology
The study describing the pre and post M & A
financial performance of the acquiring cement
companies in India is based upon descriptive
research design. The list of all the key M & A
deals during 2000 to 2013 have been generated
using various secondary data sources such as
newspaper, magazines and internet. Lit of 18
such deal was found. However, the study is
limited to seven of such deals (highlighted in
table 1). The rest of the deals were not considered
for the study for various reasons.
Deals by the acquirer such as Baring Private
Equity Asia, Blackstone Group L.P, Kohlberg
Kravis Roberts & Co. L.P, Cimpor Inversiones
SA, Calderys, Holderind Investments and
Lafarge India Holding were buyout deals by
venture capital/private equity (VC/PE) firms.
These buyout deals by the VC/PE investors
were beyond the scope of the present study.
Further, two acquisitions by Cement Roadstone
Holdings (CRH) and M & A deal by Holcim
were filtered from the sample as these were
cross boarder acquisitions and the study is
limited to only domestic M & A. Thus, the study
is confined to only M & A deals by the Indian
Cement companies. One more acquisition deal
i.e. Binani Cement and Binani Industries was
5
 Dr. Bindiya Kunal Soni

also excluded from the present study as this deal Sr. Target Acquirer Period
was between the parent and subsidiary company No. Company
and the purpose of this deal was to delist its 12 Ambuja Holcim Aug-07
Cements
subsidiary Binani Cement from the stock
13 ACE Calderys Aug-07
exchanges by buying the shares from public. The Refractories
present study considers only the strategically 14 Uttar Pradesh Jaiprakash Jan-06
driven competitive deals where the purpose of State Cement Associates
acquisition is capacity addition, diversification, Corporation
entry in to new markets etc. Table 1 provides a 15 Ambuja Holderind Jan-06
summary of the M & A deals for cement industry Cements Investments
16 ACC Ambuja Jan-05
in India from the year 2000 to 2013.
Cement India
Table 1: Summary of M & A Deals for Private
Indian Cement Industry 17 UltraTech Grasim Jun-04
Sr. Target Acquirer Period Cement Industries
No. Company 18 Raymond Lafarge India Apr-00
1 Jaypee UltraTech Sep-13 Cement Holding
Cement Cement Division
(Gujarat) (Aditya Birla
Group) (Retrieved from https://www.smergers.com/
2 Sree Jayajothi Cement Aug-13 industry-watch/indian-cement-industry/ as on
Cements Roadstone January, 2014)
Holdings
3 Lafarge India Baring Private May-13 Various financial parameters such as Profit
Pvt. Equity Asia Before Depreciation Interest and Tax (PBDIT),
4 Sree Jayajothi Blackstone Mar-13
Profit Before Tax (PBT), Profit After Tax (PAT),
Cements Group L.P.
5 Adhunik Dalmia Cement Sep-12 Ratio of PBDIT and Total Income, Ratio of
Cement Bharat Limited PBT and Total Income, Ratio of PAT and Total
6 Binani Binani Jan-11 Income, Net Worth, Capital Employed, Return
Cement Industries on Net Worth, Return on Capital Employed,
7 Avnija Kohlberg May-10 Current Ratio, Debt Equity Ratio, Interest
Properties Kravis Roberts Coverage Ratio and Earning Per share have
& Co. L.P.
been used for the analysis. These parameters
8 Samruddhi UltraTech Nov-09
Cement Cement have been analysed for three years prior to the
9 Samruddhi Grasim Oct-09 merger and three years after the merger period
Cement Industries wherever possible. For the recent mergers data
10 My Home CRH Plc Mar-08 available till now post M & A period have been
Industries considered. For collection of the financial data,
11 Shree Digvi- Cimpor Dec-07 annual reports of the acquirer cement companies
jay Cement Inversiones
from moneycontrol.com and capitaline.com
Company SA
have been downloaded. Statistical Package for
Social Sciences (SPSS 17) and Microsoft Excel

6 SIES Journal of Management, September 2014, Vol. 10(2)

A Study on Pre Merger and Post Merger/ Acquisition (M & A) Selected Financial Parameters for Selected Cement Companies in India
2003 have been used for analysis of data. For
analysing the data, Shapiro-Wilk test and Paired
Sample T Test were used.
Hypothesis
To substantiate the research objectives of the
study as discussed earlier, the following null
hypothesis have been considered.
H01: Financial data of the acquiring cement
companies in India is normally distributed.
H02: There is no significance difference between
the pre and post M & A financial performance of
the acquiring cement companies as measured by
various financial parameters.
Details of M & A Deals for Cement
Industry in India
The following section reviews the M & A deals
for cement industry in India highlighting the
reasons, payment mechanism, capacity addition,
synergies etc based upon articles in the news
paper, magazines, research reports, investor
presentations etc.
1. Acquisition of Jaypee Cement by UltraTech
Cement (Aditya Birla Group)
UltraTech Cement, an Aditya Birla Group
Company, has acquired the 4.8-million tonne
per annum (mtpa) Gujarat unit of Jaypee Cement
Corporation, for Rs 3,800 crore. This acquisition
comprises of an integrated cement unit at
Sewagram and a grinding unit at Wankbori. The
combined capacity of both the divisions is 4.8
million tonnes along with 57.5 MW coal-based
thermal power plant, limestone reserves of over
90 years at current capacity and a captive jetty at
Sewagram. With this acquisition, the company’s
current capacity increases to 59 mtpa. As part
of the deal, UltraTech will take over debt of
Rs 3,650 crore. It will issue equity worth Rs
150 crore, with the fresh issue resulting in
dilution of no more than 0.32 per cent of its
capital. The transaction implies a valuation of
$124 per tonne of cement. This deal will help
Jaypee Cement Corporation to reduce its debt
by Rs.3600 crores. Acquisition of the unit will
allow UltraTech to expand in Gujarat, where it
has lost considerable market share after it sold
Shree Digvijay Cement Co. Ltd.
2. Acquisition of Adhunik Cement by Dalmia
Cement Bharat Limited
As part of its growth plans, Dalmia Cement
Bharat Limited, acquired 100% stake in
Meghalaya based Adhunik Cement. Adhunik
Cement has a robust presence in markets of the
North East with a near 10% market share and
a capacity of 1.5 MTPA. Ownership of this
business comes at a phased investment of Rs 560
crore and follows the non-organic, acquisition
based growth strategy of Dalmia Cement Bharat
Ltd.
3. Merger (Amalgamation) of Smmruddhi
Cement by UltraTech Limited
Samruddhi Cement Limited (a wholly owned
subsidiary of Grasim Industries Limited)
merged with UltraTech Cement to create the
largest cement company in India and the 10th
largest cement company in the world. The
approved exchange ratio was 4 equity shares of
UltraTech of face value Rs. 10/- each for every 7
equity shares of Samruddhi of face value Rs. 5/-
each. UltraTech issued 14.95 crore new shares,
thereby increasing its equity capital to Rs.
274.20 crore. The merged entity will have 48.8
million tpa of grey cement across 22 plants, 504
MW of captive thermal power plants and 11.7
million cubic metres of Ready Mix Concrete
across 68 plants.
4. Demerger by Grasim Industries Limited in
to Smmruddhi Cement
7
 Dr. Bindiya Kunal Soni
As a part of the restructuring process, in the first
phase, Grasim’s cement business was demerged
into Samruddhi Cement Limited, a subsidiary
of Grasim. In the second phase, Samruddhi
Cement Limited has been amalgamated with
UltraTech Cement Limited (as discussed above).
In October 2009, Grasim Industries decided
to hive off its cement business into a separate
entity and merge the same with Samruddhi
Cement, its wholly owned subsidiary. Under
the Scheme, Grasim will transfer its cement
businesses, including related businesses to
Samruddhi and in consideration; Samruddhi
will issue one equity share of Rs.5 each to every
one equity share of Grasim, in addition to their
existing Grasim shares. On completion of the
process, Grasim shareholders will directly hold
35% in Samruddhi bringing down Grasim’s own
holding to 65%.
5. Acquisition of Uttar Pradesh State Cement
Corporation (in Liquidation) by Jaiprakash
Associates
Jaipraksh Associates took over the assets of UP
Cement Corporation Ltd. for Rs. 459 crore and
upgraded and modernised the acquired plant to
a 3.0 million MT capacity along with captive
thermal power plants.
6. Acquisition of ACC by Ambuja Cement
India Private
Holcim streamlined the ownership structure
of its operations in India by an intragroup
restructuring exercise wherein, Holcim increased
its shareholding in Ambuja Cements Ltd. to
61.39% and Ambuja in turn acquired Holcim’s
50.01% stake in ACC Ltd.. Both Ambuja and
ACC are operating as separate entities with
their own brands and go-to-market strategies.
However, the restructuring will allow for closer
back-end cooperation between the companies as
well as simplify the group structure. The merger
8 SIES Journal of Management, September 2014, Vol. 10(2)
of Holcim India was in the ratio of one Ambuja
Cement share for 7.4 Holcim India shares,
translating into an implied swap ratio of 6.6
Ambuja shares for every ACC share.
7. Acquisition of UltraTech Cement by
Grasim Industries Limited
Grasim has acquired majority stake in UltraTech,
the demerged cement business of L&T in 2004.
As per the scheme of arrangement for demerger,
the cement business undertaking was transferred
to and vested in UltraTech CemCo Limited.
Grasim had made a successful open offer bid
for 30% of the equity of UltraTech with a view
of taking management control. Concurrently,
Grasim acquired 8.5% equity stake of UltraTech
from L&T, and Grasim and its associates have
sold 14.95% of their holding in the demerged
L&T to L&T Employees’ Welfare Foundation.
The transaction is expected to provide UltraTech
an opportunity to leverage synergies with
Grasim and strengthen their ability to compete
in Indian and overseas markets.
Data Analysis and Findings
For comparing the pre and post M & A financial
performance of the acquiring Indian cement
companies, first of all the normality of the data
was checked with the help of K-S test as well as
Shapiro-Wilk test. As the data set is less than 50,
the results of Shapiro-Wilk test are reported in
Table 2. Here Pre and post signifies the financial
parameters before the M & A and after the M
& A.
A Study on Pre Merger and Post Merger/ Acquisition (M & A) Selected Financial Parameters for Selected Cement Companies in India

Table 2: Test Statistics of Shapiro-Wilk

Parameter Asymp. Parameter Asymp.
Sig. Sig.
(2-Tailed) (2-Tailed)
Pre Pbdit .402 Post Pbdit .913
Pre Pbt .079 Post Pbt .804
Pre Pat .154 Post Pat .925
Pre Ratio of Pbdit / Total Income .454 Post Ratio Of Pbdit / Total Income .239
Pre Ratio Of Pbt / Total Income .942 Post Ratio Of Pbt / Total Income .560
Pre Ratio of Pat / Total Income .661 Post Ratio Of Pat / Total Income .480
Pre Net Worth .111 Post Net Worth .418
Pre Capital Employed .228 Post Capital Employed .221
Pre Return On Net Worth .000 Post Return On Net Worth .001
Pre Return On Capital Employed .030 Post Return On Capital Employed .016
Pre Current Ratio .000 Post Current Ratio .683
Pre Debt Eqity Ratio .285 Post Debt Eqity Ratio .078
Pre Interest Coverage Ratio .358 Post Interest Coverage Ratio .293
Pre Earning Per Share .149 Post Earning Per Share .159

From table 2, it may be observed that for certain
financial parameters such as pre and post return
on net worth, pre and post return on capital
employed, pre current ratio and pre earning
per share, the p values were less than 0.05
(Highlighted in table 2). Therefore, except these
three variables, for all other variables the data is
normally distributed. Hence, the study considers
the parametric test i.e. Paired-samples T test for
comparing the performance of the acquiring
cement companies before and after the merger.
The results of the same are reported in table 3.

Table 3: Test Statistics for Two Sample Related T Test

Particulars t- value Asymp. Sig. Result of H0 Statistical

(2-tailed) Significance (at
95% confidence
level) after M & A
PBDIT -3.285 .009 Rejected Significant
PBT -3.046 .016 Rejected Significant
PAT -3.360 .010 Rejected Significant
Ratio Of PBDIT / Total -2.483 .535 Not Rejected Not Significant
Income
Ratio of PBT / Total Income -2.489 .632 Not Rejected Not Significant
Ratio of PAT / Total Income -2.866 .155 Not Rejected Not Significant
Net Worth -3.484 .005 Rejected Significant
9
 Dr. Bindiya Kunal Soni
Capital Employed -2.146
Return On Net Worth 1.207
Return On Capital Employed 1.318
Current Ratio .508
Debt Eqity Ratio 1.419
Interest Coverage Ratio -2.189
Earning Per Share -1.539
As per the test statistics of Paired Sample T
Test, the event of M & A did not elicit a statistically
significant change in the financial performance
for majority of the parameters (p>0.05), except
PBDIT, PBT, PAT, Net worth and Capital
Employed. For the rest of the parameters, it may
be said that there is no statistically significant
improvement in acquiring cement companies’
performance in absolute terms after the M & A.
The profitability of the companies as measured
by PBDIT, PBT and PAT has increased in
absolute terms post M & A. However, the total
income has not increased proportionately after
the M & A. Therefore, the ratio of PBDIT/
Total Income, PBT/Total Income and PAT/Total
Income did not show significant improvement in
the acquiring companies’ financial performance
after M & A.
For statistically significant changes in
Net worth and Capital Employed, it may be
said that companies fund such deals either
through raising equity or debt which adds to
the existing asset base and share capital of the
company. Therefore, after the M & A, the Net
Worth and Capital Employed were observed to
be greater. However, return on net worth and
capital employed have not shown significant
improvement after merger. This could be
attributed to heavy interest and financial
charges. Cement industry is a capital intensive
and therefore highly levered. Hence, the interest
10
.043 Rejected Significant
.270 Not Rejected Not Significant
.131 Not Rejected Not Significant
.415 Not Rejected Not Significant
.235 Not Rejected Not Significant
.066 Not Rejected Not Significant
.178 Not Rejected Not Significant
payment expenses are usually on higher side.
Further, the current ratio which indicates
the liquidity position of the company has also
not changed significantly after the merger. For
some companies, the pre merger current ratio
was observed to be marginally higher than the
post current ratio. The same is true with the
debt- equity and interest coverage ratios which
have not changed post M & A.
For earning per share, it may be observed
that though PAT has increased in absolute
terms after the M & A, there is no significant
improvement in EPS. This could be due to large
number of outstanding shares after the M & A.
The above mentioned analysis of pre and
post M & A deal is a generalised one with
respect to all the acquiring cement companies.
This is further supported by the deal wise
mean analysis of pre and post M & A financial
performance attached as annexure 1.
Conclusion
The paper reviews the consolidation in India
cement industry through M & As during the
year 2000 to 2013. The findings suggest that
there is an inconclusive impact of M & As on the
post M & A financial performance of the
acquiring companies. The results are in
line with many such studies as described in
SIES Journal of Management, September 2014, Vol. 10(2)
A Study on Pre Merger and Post Merger/ Acquisition (M & A) Selected Financial Parameters for Selected Cement Companies in India
literature review segment. The profitability of
the acquiring cement companies as measured
by PBDIT, PBT and PAT has increased after
the M & A in absolute terms. The same is the
case with Net Worth and Capital Employed.
However, return on net worth and capital
employed, current ratio, debt-equity ratio,
interest coverage ratio and earning per share
have not shown any significant improvement
after the M & A.
It may be interpreted that the acquiring
companies could have achieved the objective of
capacity addition and growth with the M & A,
but not have been successful in improving the
profitability yet. These deals would have helped
the companies in brining economies of scale
and price-stabilisation. Further, it may be said
that post M & A study period (time/duration)
could not have been sufficient to indicate the
improvement in the financial performance and
therefore the profitability. Slowdown in demand,
rising input cost, duties and taxes which are
beyond the control of companies could have
also contributed to this result. Therefore, the
same study could produce a different result, if
carried out for extended post M & A time period
in future. Further, the duration of the study i.e.
2000 to 2013 include the economic recession
(dot com bubble and real estate bubble) which
could have contributed to this result. Positive
synergies can be generated in the long run with
proper use of the resources acquired and smooth
integration process.
References
yy Ahmed, A., Saeed, M.,2013. Should
Banks Merger with the Cement Industry:
Empirical Study of Pakistan. World
Journal of Management and Behavioural
Studies. 1 (1).1-5.
yy Aurora, R., Shetty, K., Kale, S.,2011.
Mergers and Acquisitions. New Delhi:
Oxford University Press.
yy Ismail, T., Abdou, A., Annis, R.,2011.
Review of Literature Linking Corporate
Performance to Mergers and Acquisitions.
The Review of Financial and Accounting
Studies. 1. 90-104.
yy Khan, A.,2012. Post-Merger Financial
Performance Appraisal of Acquiring Banks
in India, A Case Analysis. International
Journal of Research in Commerce &
Management. 3 (7). 172-175
yy Kumar, B.,2011. Mergers and Acquisitions
Text and Cases. New Delhi, Tata McGraw-
Hill
yy Kumar, P., John, S., Senith, S.,2013. A study
on Progress of Indian Cement Industry.
British Journal of Marketing Studies
yy Kumara, M., Satyanarayana.,2013.
Comparative Study of Pre and Post
Corporate Integration through Mergers
and acquisition, International Journal of
Business and Management Invention. 2(3),
31-38.
yy Poornima, S., Subhasini, S.,2013. Impact
of Mergers and Acquisitions across
Industries in India. International Journal of
Management Research and Development,
3 (2), 113 - 125
yy Sharma, S.,2013. Measuring Post Merger
Performance-A Study of Metal Industry.
International Journal of Applied Research
and Studies. 2(8). 1-9.
11
 Dr. Bindiya Kunal Soni

Annexure I
Deal wise Pre and Post M & A Mean of Financial Parameters for Acquiring Cement Companies
in India

Pre and Post Aditya Ambuja Dalmia Grasim Grasim UltraTech Jaiprakash
Financial Birla Cement (2009) (2004) Associates
Parameter
Pre PBDIT 3147.06 551.19 122.13 2296.35 861.44 1307.26 864.64
Post PBDIT 4980.48 2085.89 595.92 2268.99 1443.46 3260.12 2834.34
Pre PBT 2254.82 271.51 13.76 2188.33 409.72 992.20 453.49
Post PBT 3825.40 1754.75 262.64 1937.77 1180.89 2392.09 1273.59
Pre PAT 1647.89 248.22 (0.72) 1482.20 377.44 674.96 339.12
Post PAT 2655.43 1285.73 155.60 1464.95 842.73 1715.74 903.63
Pre PBDIT /
Total Income 0.25 0.32 0.32 0.25 0.19 0.26 0.28
Post PBDIT /
Total Income 0.24 0.36 0.25 0.32 0.23 0.25 0.30
Pre PBT /
Total Income 0.18 0.16 0.26 0.24 0.09 0.19 0.14
Post Pbt /
Total Income 0.19 0.29 0.11 0.27 0.19 0.18 0.15
Pre Pat /
Total Income 0.13 0.14 0.09 0.16 0.08 0.13 0.10
Post PAT /
Total Income 0.13 0.22 0.06 0.21 0.14 0.13 0.11
Pre Net Worth 9378.17 1753.68 263.92 6450.94 2928.29 1837.39 1478.98
Post Net
Worth 15234.82 4001.07 2803.15 8795.98 4307.09 9396.13 7975.749
Pre Capital
Employed 12758.03 2820.46 1638.27 7247.15 3778.90 3190.66 4623.93
Post Capital
Employed 20779.19 3629.04 5076.98 8929.65 4823.06 12892.98 24644.18
Pre Return On
Net Worth 18.64 0.14 0.00 0.22 0.13 0.35 18.64
Post Return
On Net Worth 17.43 0.32 0.06 0.17 0.20 0.20 12.57
Pre Return
On Capital
Employed 23.51 0.20 0.03 0.31 0.23 0.39 15.80

12 SIES Journal of Management, September 2014, Vol. 10(2)

A Study on Pre Merger and Post Merger/ Acquisition (M & A) Selected Financial Parameters for Selected Cement Companies in India

Pre and Post Aditya Ambuja Dalmia Grasim Grasim UltraTech Jaiprakash
Financial Birla Cement (2009) (2004) Associates
Parameter
Post Return
On Capital
Employed 21.29 0.56 0.09 0.26 0.30 0.28 10.44
Pre Current
Ratio 0.70 0.62 4.65 0.80 1.16 0.99 1.16
Post Current
Ratio 0.66 0.77 1.05 1.12 0.82 1.11 1.30
Pre Debt
Eqity Ratio 0.30 9.95 0.22 29.57 21.97 12.78 2.12
Post Debt
Eqity Ratio 0.29 2.27 0.73 14.79 22.01 13.81 2.04
Pre Interest
Coverage
Ratio 12.89 4.63 0.38 21.58 4.41 15.36 2.23
Post Interest
Coverage
Ratio 19.24 34.71 2.54 35.77 11.55 17.39 2.36
Pre Earning
Per Share 76.11 15.01 0.04 161.68 41.17 54.09 16.76
Post Earning
Per Share 96.85 8.55 6.06 159.74 91.93 82.90 7.30

13
Copyright of SIES Journal of Management is the property of SIES College of Management
Studies and its content may not be copied or emailed to multiple sites or posted to a listserv
without the copyright holder's express written permission. However, users may print,
download, or email articles for individual use.