EFFECT OF MERGER AND ACQUISITION ON CORPORATE PERFORMANCE IN FMCG INDUSTRY WITH REFERENCE TO BALAN NATURAL FOOD PRIVATE LIMITED’S BRAND B NATURAL ACQUIRED BY ITC LIMITED

Abstract

Over a million Merger &Acquisition cases have occurred globally over the years, but between 70 and 90 percent of them have failed. Even though they are efficient ways for organisations to grow in size, but mergers and acquisitions do carry some risk. It is essential to objectively evaluate both the positive and negative effects of merger and acquisition strategy on company performance in order to warn organisations away from making unreasonable merger and acquisition decisions. FMCGs have a significant impact on the economy, due to their inelastic nature and ability to affect every element of the consumer's life. This encouraged me to do research work on the effect of merger and acquisition strategy on the performance of FMCG industry. For this analysis, acquisition of ITC Limited is selected as one of the FMCG company who acquired Balan Natural Food Private Limited’s Juice Brand B Natural for inorganic expansion. The performance of the acquiring company three years i.e. 2012 -2014 before and seven years after the acquisition is examined in the current study. The whole research mainly collects secondary data from financial annual reports, websites, newspapers, articles, journals, magazines, text books. Ratio analysis will be used as a method to ascertain pre- and post-acquisition insights. The data is compiled and tabulated with the help of MS Excel.