A Case Study of Acquisition of Avon Organics Limited by Arch Pharmalabs Limited

Dr. Bisma Afzal Shah ., Dr. Khursheed Ahmad Butt .


The corporate sector all over the world is restructuring its operations through various types of consolidation strategies in order to face the challenges posed by globalisation and liberalisation, which have led to the greater integration of national and international markets. In order to cope up with the constantly changing environment and increasing competition, constant growth of business organisations has become imperative. The Indian corporate sector has experienced a boom in mergers and acquisition led restructuring strategies especially after liberalisation. Banking and Finance, Drugs and Pharmaceutical, Textiles, Telecommunication, Cement, Computer Software, FMCG etc. are the major sectors in which it has occurred. The present study is an attempt to bring out the effectiveness of such strategies in realizing the desired objectives in the case of Drugs and Pharmaceutical sector, by analysing a case study of acquisition of Avon Organics Limited by Arch Pharmlabs Limited. Ratio analysis has been conducted to measure the overall performance of the acquiring firm. Besides, t-test has been used to check for any statistical significant difference between the means post the acquisition. Overall, it was concluded that the acquisition failed led to create a positive impact on the operating performance, financial performance and shareholders’ wealth of the acquiring entity.


Mergers and Acquisitions, Operating Performance, Financial Performance, Shareholders’ Wealth

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