The Merger Process

Mergers are transactions in which the ownership of companies, other business organizations or their operating units are transferred or combine (Adesegun & Nelson, 2013). Merger plays vital role for an organization in achieving its financial strategies and varied objectives or goals. Because when a company enters into merger it gives strength and growth to companies and improve competition which are good in realizing synergistic benefits. The growth of company involves two ways: one is the organic and second is the inorganic growth. Organic growth arises when company grows from its own resources it is also known as internal growth. Inorganic growth includes when company seek funds from outsiders in shape of merger of another business. Inorganic

First study explains that merger momentum increases the synergies of merger group. Second theory explains, if the managerial objectives derive the merger then it becomes more worsen. Third theory describes that merger affected by the investor’s sentiment other than value created through merger. The result shows positive correlation with the pre-merger reaction as compare to other mergers in the recent post mergers. This conflict finding in the existing studies of pre and post mergers implies that there should be extensive and intensive studies should be carried out before going for merger process. Though merger process is not a onetime process but it carries well thought process because it became important when number of studies revealed that there is some organization who gone for merger but did not

In contrast, the mergers produced significantly positive result in post-merger rather than pre-merger. He also explained that merger in the same industry produce significant results then merger takes place in different sectors (Sinha, Kaushik, & Chaudhary, 2010). Mergers in the past years were duly happened with the related firms and reflect trend in few industries (Joseph & Vidhan, 2006). The conflict findings put decision makers and organizations in trouble whether merging of two organizations in same industry or different will be a worthwhile or not.
The study focuses on pre and post mergers in financial and non-financial sector of Pakistan and India. The previous studies showed mixed results that’s why this study will incorporate the essential part by taking financial and non- financial sectors of Pakistan and India and would add contribution in the existing body of knowledge. The findings of the study provide shareholder, management, traders and other concerning person with insight upon which they can take their decision related to merger. Therefore, it is an attempt to determine and evaluate the effect of pre and post-mergers on the