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Performance of Acquirer in the

Manufacturing Sector:
Analysis of Economic Value Added in
Different Industries of the
Manufacturing Sector in India

N. M. Leepsa
Chandra Sekhar Mishra

Abstract
Acquirers make M&A (Mergers and Acquisitions) deals which is the true performance measure in evaluating
with the objective of improvement of performance M&A performance as it takes into account the
and wealth creation for the company, or shareholder opportunity cost. As far as M&A in Indian
value creation. However, in the past literature, the manufacturing companies is concerned, limited study
performance of companies after M&A is evaluated has been made and specifically, the performance
using traditional performance measures like Return on evaluation in industry wise analysis is yet to be found in
Assets (ROA), Return on Capital Employed (ROCE), literature using this new measure called EVA.
and Earning per Share (EPS); these measures do not
take into account the cost of capital. Limited studies Keywords: Mergers and Acquisitions, Economic Value
have taken into account Economic value Added (EVA), Added, Manufacturing companies

Performance of Acquirer in the Manufacturing Sector:


ISSN: 0971-1023 | NMIMS Management Review
Volume XXXI August 2016
Analysis of Economic Value Added in Different Industries 41
of the Manufacturing Sector in India
Introduction: performance of the acquiring firm using the traditional
In today's business world, it is difficult to maintain a measures. Economic value added® (another term for
company's current position and grow faster than this metric is Economic profit) is a performance
competitors. This is the result of intense competition measurement tool used to analyze whether the value
from global counterparts and rapid technological of business is created or lost. EVA performance of
changes. In this situation, companies seek growth companies might vary from company to company
strategies to create value for shareholders through depending on the industry. This study basically takes
mergers and acquisitions (M&As). As per Figure 1, economic profit as a new measure of performance.
from 1999-2000 to 2015-16, there have been 5,236 EVA is the registered trademark of Stern Stewart & Co.
merger deals and 14,181 acquisition deals that have and has identified a specific method of calculating
been announced in India with the acquisition economic profit. A company may earn a profit, but this
consideration of more than Rs.17,400 billion (Source: is not sufficient. The company has to calculate profit
Economic Outlook, CMIE). Hence, the numbers of above the cost of capital, which is called economic
mergers and acquisitions have grown both in volume value added. But limited past studies have taken the
and value not only in different parts of the world but parameter of EVA to evaluate M&A as the true
also in the Indian corporate sector as shown in Figure measure to know if value is created or destroyed as a
1. Thus, most of the researchers have been involved in result of the M&A transaction. Hence, the present
finding out the pre and post M&A performance to study is an attempt to make EVA analysis of different
know whether there has been any improvement in the companies in different industries that have opted for
performance and value addition through M&A. M&A in the manufacturing sector in India.
However, empirical studies till now have evaluated the

Figure1: Volume and Value of Mergers and Acquisitions in India


Number of Mergers and Acquisitions

Source: Economic Outlook, CMIE

Performance of Acquirer in the Manufacturing Sector:


ISSN: 0971-1023 | NMIMS Management Review
42 Volume XXXI August 2016
Analysis of Economic Value Added in Different Industries
of the Manufacturing Sector in India
2. Literature Review Solomon (1965) calculated 'economic profit' as a
Review of past studies has been made to give an measure of wealth creation “as the difference
overview of the concept of EVA to understand its between two quantities, net earnings and the cost of
meaning as used in the study. Next, an attempt has capital.”
been made to show how EVA is a better measure of
performance compared to other traditional According to Mohanty (2006), EVA is just another
performance measures; the advantages and name for this economic profit since according to
disadvantages of EVA as a performance metric is also various economists, a firm earns true profit only if it
discussed in this section. earns more than the investors expect. Morard, B.
(2009) suggests that both EVA and economic concept
2.1. Related literature on the Concept of Economic is based on the same principle that both take into
Value Added: account the cost of equity. However, EVA is a modified
(Hawawini, et al., 2003) state that different authors version of economic profit. EVA has more of
use different names for the same concept of residual accounting adjustments to arrive at the real profit
income. For example, the consultancy firm Stern earned by the company for value creation.
Stewart has invented the two terms Economic Value
Added (EVA) and Market Value Added (MVA) to reflect Pandey (2005) also observed that the concept of
residual income. Economic profit (EP) is also a version economic profitability is equivalent to the concept of
of the residual income method that measures economic value added (EVA). Schuster & Jameson
operating performance. (2003) have compared four new measures such as
Economic Value Added (EVA®), Economic Profit, Cash
According to Ray (2012), the idea of Economic Value Value Added, or Added Value to know the best
Added (EVA) might be new but the concept is old. In measure of shareholder value. In the paper, the
modern economics and finance literature, EVA holds a authors observe that the Economic Profit (EP)
crucial role in measuring the performance of the measure promoted by McKinsey & Co., has found
business. In corporate finance, EVA, a registered application mainly in the measurement of financial
trademark of Stern Stewart & Co, is an assessment of performance. Economic profit has a strong
economic profit of a company. It estimates the value relationship to the discounted cash flow method. Its
being created in excess of the required rate of return basic elements resemble those of the EVA approach,
for the investment made by the company's investors although the necessary conversions from the
such as shareholders and debt holders. accounting data are far less intensive. In comparing
EVA to EP, there's a strong similarity in the basic
EVA is fundamentally not different from the notion of calculation, with slight differences in the amount of
residual income (net income minus a charge for the conversions required, as mentioned, and in the
cost of equity capital) as suggested by economist, definition of the capital ratio.
Alfred Marshall in the 1890s. Marshall had defined
economic profit as “total net gains less the interest on Singh, et al. (2012) suggest that economic value added
invested capital at the current rate.” Later, David is a measure of economic profit which is the difference

Performance of Acquirer in the Manufacturing Sector:


ISSN: 0971-1023 | NMIMS Management Review
Volume XXXI August 2016
Analysis of Economic Value Added in Different Industries 43
of the Manufacturing Sector in India
between the net operating cost of capital minus the profit as it produces information that is relevant,
cost of invested capital. Hamilton, et al. (2009) state timely and specific to the value creation for
that EVA measures the amount of economic profit that shareholders. EVA is a proactive approach for
is earned from the various decisions taken by the shareholder value creation that takes into account risk
managers of the company. Stewart (2009) also calls while computing returns.
real economic profit as economic value added (EVA)
since it is based on economic profit and not accounting Hawawini, et al. (2003) suggest that traditional
profit, and corrects for all accounting distortions by accounting measures like ROA have limitations due to
charging a cost for all forms of capital. Baran, et al. the conceptual disadvantage of accounting
(2007) state that economic value added (EVA) is the conventions, and do not take into account risk while
measure of economic profit, that is, the difference calculating the return. These accounting ratios neither
between the capital revenues and economic costs indicate the future profitability nor past economic
(opportunity cost, not accounting costs). The company profitability. Thus an alternative measure of
should adopt those strategies that have positive EVA performance indicating value creation needed to take
or at least zero. The higher the EVA value the higher is into account the risk and the time value of money. EVA
the shareholder's value creation or growth of market or economic profits are thus the performance
value. measures that reflect whether the strategies adopted
by companies have created value for shareholders.
2.2. Related Literature on EVA as a Measure of According to Sharma & Kumar (2010) the traditional
Performance: performance measures such as ROA, ROE, NOPAT and
In today's complex business environment where firms EPS fail to measure the true profits of a company.
vary in terms of type of business they do, nature of These accounting ratios are unable to capture whether
products handled and volume of sales made, value is destroyed or created for a particular project.
performance measurement is of utmost importance.
The right type of performance measure is not to judge According to Chile (2009), gone are the days when the
a business, but to arrive at accurate results of business. company's goal was profit maximization and wealth
maximization; now value maximization is the
Economic Value Added (EVA) is an alternative to buzzword in the corporate world. In this regard, Stern
traditional performance measures. Generally, it is Stewart's EVA is a new way of measuring performance
believed that EVA is truly designed for large companies that captures the true economic profit of a firm as it is
and is the best performance measure. EVA is a better directly linked to shareholder wealth creation. EVA
measure of performance than other traditional profit indicates how the shareholders' money is utilized by
based performance measures. The company can use the management and how much economic value is
EVA as the performance measure for choice of added. Singh, et al. (2012) have used the EVA measure
strategy like mergers and acquisitions. It is also a better since it is a better measure than other market
measure to guide the value creation of companies measures which are volatile in nature. EVA eliminates
(Rakshit, 2006). Khan, et al. (2012) also observe that noise and volatility in market valuations and shows
EVA is the true measure of performance and economic valid and reliable results. Positive EVA shows that the

Performance of Acquirer in the Manufacturing Sector:


ISSN: 0971-1023 | NMIMS Management Review
44 Volume XXXI August 2016
Analysis of Economic Value Added in Different Industries
of the Manufacturing Sector in India
company has been able to create value for that the change in EVA helps to show the trend of
shareholders (Martani & Saputra, 2009, p26). EVA economic performance of companies. If there is
shows the economic profit and not just the accounting positive change in EVA for a period, it indicates there is
profit. According to Burksaitiene (2009), economic a reduction in cost of capital, proper utilisation of
value added (EVA) has a better explanatory ability than assets or deployment of capital by managers, or
traditional accounting measures such as net income, investment in positive NPV projects.
residual income and operating income.
Chen & Dodd (1997) affirm that EVA is a useful
Stewart (2009) observes that EVA helps managers in measure of performance and conceptually it is no
choosing value enhancing projects or strategies that different from residual income. It is a useful tool to
give incremental cash flows to the company and is judge the managerial ability to choose better contracts
especially helpful during a period of economic in the interest of the shareholders.
recession and liquidity crisis. Griffith (2006) suggests

Figure 2: Economic Value Added as a Measure of Performance

Accounting Measure: Downside Market Value Measures: Shortcomings


• Treatment of capital items and revenue • Share prices are volatile
• Accounting measures like EPS are sample to use • Measures like P/E Ratio is dependent on EPS,
but do not explain reality which suffers from its own limitation
• Distortion in measurement and interpretation
of accounting performance
• Fail to recognize opportunity cost and risk
adjusted rate of return

Economics Value Measures - The Solution


• They consider charge for capital or opportunity cost of capital which is central to value creation
• EVA takes into account riskiness of investment which is factored into the cost of equity capital.

Compiled from Yook, C.C., 2004. The Measurement of Post-Acquisition Performance using EVA.
Journal of Business and Economics, 42 (3&4). pp. 67-83.

EVA has gained importance in the corporate and future cash flows exceed the cost of capital,
investment world as a more current yardstick for theoretically EVA is a performance measure that is
company performance (Yao, et al., 2009). EVA has 40% directly linked to the creation of shareholder wealth
explanatory ability compared to a maximum of 13% (Yook, 2004). Lakstutienea et al. (2015) studied the
from traditional methods (Uyemura Research, 1996), impact of acquisitions using both profitability ratios
41.5% compared to 36.5% from traditional methods and economic value added and found that both
(Biddle, 1996). EVA is a more effective measure of profitability ratios and economic value added have
M&A performance compared to other traditional decreased after an acquisition in majority of cases.
methods [(Hu &Yitan, 2000); (Wang, 2003); (Qu &
Jianwei, 2003)] cited from (Xiao & Tan, 2007). As the Table 1 shows the advantages and disadvantages of
value of a company depends on the extent to which the economic value added performance metric:

Performance of Acquirer in the Manufacturing Sector:


ISSN: 0971-1023 | NMIMS Management Review
Volume XXXI August 2016
Analysis of Economic Value Added in Different Industries 45
of the Manufacturing Sector in India
Table 1: Advantages and Disadvantages of EVA

Advantages Disadvantages

EVA is a useful tool for various decisions made Short-term performance measure. It is not suitable
by the management like bonus plan. for long term investment.

EVA makes sure that there is an optimum EVA for the future cannot be measured in the true
capital structure by ensuring that the firm is sense since future returns are uncertain. It is
accurately levered. subjectively estimated.

It indicates the real cash flows to the business EVA does give true performance when influenced
by factors like inflation.

It is highly correlated to the market value of It is not a suitable measure for those companies
the firm and stock returns. EVA improves that have made large investments taking into
performance of the stock. account the long term benefits.

It takes into account all capital costs including EVA does not have incremental value in predicting
the cost of equity. performance of mergers and acquisitions .

The EVA measure achieves the goal of the In practice, the calculation of EVA is comp lex as it
company and minimizes agency conflicts and requires lots of adjustments. For example, the cost
costs. of equity for an unlisted company is difficult to
calculate.

It is a size and situation neutral concept as it EVA only reflects value creation in the specific
adjusts to size of the firm or level of business period while value creation is for the entire life of
activities and companies across industries. It the company.
helps in comparison of different companies
since the change in EVA momentum is taken.

The use of EVA as a performance measure EVA is simply a performance metric and if the
enhances corporate governance practices since company is aware of how to create value, then this
the managers avoid the value destructive measure is not helpful.
activities in the business and invest in those
projects that add value to shareholders’
wealth.

Source: Collected from various sources from literature

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries
of the Manufacturing Sector in India
The factors affecting EVA are shown in the figure below:

Profitability /
Earnings Growth

Leverage /
Capital Structure

Company's Age /
Established Company
Factors Affecting
Economic Value Added
Company's Size /
Regulator Attention

Investment
Environment

Nature of Market Wide


Performance

Source: Author's compilation from various sources in literature

Companies that have a high potential to grow in future merger liquidity performance improved for
have high EVA, because high sales lead to high NOPAT shareholders of acquirer companies (Pawaskar, 2001);
and hence, high EVA. NOPAT increases when the (Kumar & Rajib, 2007). A company improves efficiency
company has potential to earn more or increase through M&A (Weston, et al., 2010). A cash deal
profitability. Similarly, large size firms have better EVA provides better returns to the shareholders of both the
than small size firms since large companies have the acquirer and the target companies. Stock financed
ability to generate higher NOPAT. Additionally, old and acquisitions are better than cash financed acquisitions
established firms have higher EVA as they have control (Pautler, 2001); (Frederikslust et al., 2005);
over efficiency and expenses. It is also observed that (Depamphilis, 2010). Those who are successful in the
with increase in leverage, there would be an increase first merger show declining performance later. M&A
in the stock returns and thus economic value added experience leads to poor performance (Conn, et al.,
would increase (Mauritania & Saputra, 2009). 2004); (Suh, et al., 2013); (Phelan & Mantecon, 2005).

2.3. Related literature on M&A performance using 2.4. Related literature on EVA and M&A Performance
traditional measures Empirical analysis done till date has been carried out
There is a decline in profitability after a merger. A mostly using traditional performance measures to find
merger results in either no gains or very little out the difference in the pre and post M&A period.
profitability each year (Ravenscraft & Scherer, 1987); Stern, et al. (2007) have suggested that EVA analysis is
(Singh, 1975); (Newbould, 1970); cited from (Daga, a better measure for analyzing the performance of
2007). There is no post-merger improvement of proposed acquisitions in terms of whether the
companies' solvency position (Kumar, 2009). The post acquisition creates value or not and to what extent.

Performance of Acquirer in the Manufacturing Sector:


ISSN: 0971-1023 | NMIMS Management Review
Volume XXXI August 2016
Analysis of Economic Value Added in Different Industries 47
of the Manufacturing Sector in India
The EVA analysis has the advantage of indicating value market.
creation on an annual basis.
Larsen, (2010) has evaluated the merger between
Yook (2004) evaluated the performance of companies Vestas and NEG Micon and found that there is a steady
that have opted for acquisitions and found that the decline in the economic value added and shareholder
acquiring firms suffer from decreasing EVA (without value has been destroyed. Huang (2011) found that
adjusting for industry effects) in the post-acquisition firms that have higher market value and economic
period. When the performance is judged taking into value added are more involved in M&A transactions
account industry adjusted returns, the difference in since they have better managerial ability and lower
results is insignificant. agency costs. The author also found that the economic
value added has declined after mergers and
Xie (2009) found that the post-M&A EVA is greater acquisitions. Kan & Ohno (2012) have studied the post-
than the pre-M&A period because the return on merger performance in the banking sector and found
invested capital improved due to the merger synergies that all the mergers have contributed to improve the
and integration of resources of acquirer and target EVA of banks and have been successful. The reason for
firm. The EVA after two years of merger increased such positive impact of mergers is that there was an
continuously in subsequent years because of the increase in the loan market share. They also observed
synergistic benefits that are achieved gradually by the that the higher the loan market share the bank
company due to a merger. The author also suggested acquired after the merger, the higher EVA it achieved.
that those managers who want to enhance value for Singh, et al. (2012) have studied the performance of
the company and adopt strategies for business cross border M&A using EVA and found that cross
development, should give importance to EVA and border acquisitions destroy shareholders' value of
value creation since long-term market value is equal to Indian carriers.
intrinsic value of the company.
Aik, Hassan & Mohamad (2015) used the economic
Xiao & Tan (2009) found that the EVA and the rate of value added (EVA) approach to find synergistic
EVA increased significantly in the short run period but benefits from horizontal M&A deals. The author found
in the long run period, the performance was not that there is no significant improvement in operating
noteworthy. However, in the year of the merger, the and financial performance in the long run for the
efficiency of the companies improved compared to the bidder firms. Rather, the operating performances of
industry while in the first and second year, the bidder firms decreased in the post-merger period,
performance declined due to the time gap given for whereas there is no significant positive change in
the integration of the two companies. The author operating performance of the target firm in the same
suggested that even though the company did not sample period. Thus, in terms of EVA, there was no
perform well in the initial years, in later years, the synergy gained out of M&A deals in Malaysia.
merger would enhance the operating performance of
the company under the efforts of the acquirer and
target company, pressure from government and

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Analysis of Economic Value Added in Different Industries
of the Manufacturing Sector in India
3. Research Gap Identified 5. Research Methodology
From the above literature survey, the following gaps The research is carried out in the following manner:
have been identified: 5.1. Data Collection Sources:
• Earlier studies as surveyed through the The data for analysis has been collected from various
literature have shown mixed results. From sources such as CMIE Prowess, CMIE Business
literature, there is no conclusive evidence Beacon, AceEquity database and Capitaline. The data
about the impact of M&A on corporate available in the Business Beacon database provides
performance in India. Hence, it requires useful information on the volume and value of M&A
relooking into the same with a larger M&A deals announced in India. However, data collected
sample from recent years. from Centre for Monitoring Indian Economy (CMIE)
• M&A transactions have grown in terms of Prowess database has been used to collect data on
frequency, value and volume in India in recent M&A deals as well as financial data on acquirer and
years. Earlier studies were based on a limited target firms. Some data has also been collected from
number of merger and acquisition deals the Reserve Bank of India (RBI) website.
mostly in the USA and UK. Hence, there is a
need to investigate the post M&A 5.2. Sample Selection Criteria
performance in India. To carry out the study, sample M&A deals have been
• Previous year studies mostly used traditional drawn from different industries in the manufacturing
performance measures to evaluate the sector in India. Neither the acquirer nor the target
corporate performance after an M&A deal is belongs to the non-manufacturing sector. Based on a
done. As far as literature review is concerned, particular M&A deal, an acquirer firm in the
studies with respect to post M&A manufacturing sector in India was selected with a
performance in terms of economic profit matched target firm that belongs to the manufacturing
(here, EVA), which is supposed to be the true sector in India. The manufacturing sector is selected
profit for shareholders, are few, particularly in because the highest number of M&A deals has been
India. done in this sector. Taking M&A deals only from the
manufacturing sector would bring heterogeneity in
4. Research Objectives of the Study: the sample (Sorensen, 2000). The sample is selected
Based on the research gap identified from the from manufacturing companies. The M&A data has
literature, the following research objectives are been collected for M&A deals done from 1st January
framed for the study: 2000 to 31st December 2008. Even if there are a large
• To examine the trends of EVA in different number of companies in the manufacturing sector,
industries in the manufacturing sector in India filtering the sample as per the criteria of sample
• To find companies in different industries that selection has reduced the sample of manufacturing
have positive, negative or no growth in terms firms involved in M&A. Thus, the final sample consists
of EVA after an M&A transaction. of 407 M&A deals (290 merger deals and 117
acquisition deals). The industry classification is made
according to the CMIE prowess classification. The

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Analysis of Economic Value Added in Different Industries 49
of the Manufacturing Sector in India
industries have been classified as chemical industry, financial data has been collected from 1997 to 1999 as
diversified industry, food and beverage industry, metal pre-M&A data and from 2001 to 2003 as post-M&A
and metal products industry, miscellaneous data. Similarly, for an acquirer which has undertaken
manufacturing industry, non-metallic and mineral an M&A deal in the year 2008, financial data has been
industry, textile industry and transportation collected from 2005 to 2007 as pre-M&A data and
equipment industry. Financial data has been collected from 2009 to 2011 as post-M&A data. Acquirers and
st st
from 1 April 1997 to 31 March 2011 based on the matched target companies that don't have continuous
year of the M&A deal. For example, for an acquirer data for the sample period have been removed from
which has undertaken an M&A deal in the year 2000, the sample.

Table 2: Sample as per the Type of Industry of Acquirer and Target

Industry Acquirer Industry Target Industry

Merger Acquisition Total Merger Acquisition Total

Chemicals 98 37 135 96 33 129

Diversified 18 6 24 3 2 5

Food and Beverage 39 17 56 44 15 59

Machinery 39 12 51 40 14 54

Metal and Metal Products 27 14 41 29 19 48

Miscellaneous Manufacturing 5 4 9 9 7 16

Non Metallic and Mineral Products 19 6 25 21 8 29

Textiles 26 10 36 28 10 38

Transport Equipment 19 11 30 20 9 29

Total 290 117 407 290 117 407

Source: Compiled from CMIE Prowess Database

Table 2 shows the sample as per the type of industry of the acquirer and target. As per Table 2, the final sample
consists of 407 M&A deals out of which there are 209 merger deals and 117 acquisition deals.

Table 3: Sample of Control Firms


Industry Economic Value Added

2000 2001 2002 2003 2004 2005 2006 2007 2008

Chemical 236 256 286 295 307 325 410 411 192

Diversified 8 8 9 9 9 9 10 9 7

Food and Beverage 148 163 199 218 231 263 316 319 134

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Analysis of Economic Value Added in Different Industries
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Industry Economic Value Added

2000 2001 2002 2003 2004 2005 2006 2007 2008

Machinery 138 143 163 176 163 171 176 209 101

Metal and Metal Products 99 107 164 159 176 179 198 231 90

Miscellaneous Manufacturing 58 64 78 88 97 101 106 136 56

Non Metallic Mineral 50 55 59 64 68 66 71 79 41

Textiles 162 159 170 189 196 199 225 258 132

Transport 42 52 63 73 78 86 102 105 48

Source: Compiled from CMIE Prowess Database

Table 3 shows the sample of control firms taken for the study. Control firms are those companies which have not
undertaken any M&A deals during the sample period. Control firms are selected based on the type of Industry.
Industry medians are taken for the EVA and rate of EVA measures.

5.3. Financial Parameter: EVA description scope of this study since such information and data are
The pre and post-M&A performances are compared not easily available. From equity holders' point of view,
using Economic Value Added (EVA®) (a metric of economic value added can be found as below:
economic profit) as the measure of performance to
observe whether M&A performance shows any Economic Value Added = Net Profit – Cost of Equity
different results compared to past studies. *Average Net Worth
Details for EVA calculation:
The Formula for EVA is as follows: • For the study, the rate of EVA (EVA/Average Net
EVA= Net Operating Profit before Interest and after Tax worth) is taken so that it would adjust for the size
(NOPAT) – (WACC × Invested Capital) of the companies.
• Beta values have been collected from the CMIE
Where, WACC stands for Weighted Average Cost of prowess database. The beta of a scrip is
Capital. computed by CMIE and stored in the database. It
Ke= Rf + βi (Rm-Rf) is the slope of the regression line derived by
Where regressing the weekly returns of the scrip against
Rf = Risk Free Rate of Return (Here 7%) the weekly returns on the COSPI. The regression
Rm= Rate of Return on Market Index (Here 15%) is done every year in April and it uses the latest
Ke= Cost of Equity five years of weekly returns for the scrip and for
βi = Beta the COSPI. COSPI stands for 'CMIE Overall Share
Price Index'.
Several accounting adjustments have been suggested • The yield on the 15-year Long Term Government
by Stern and Stewart for finding NOPAT and invested Bond is considered as the Risk-Free Rate of
capital. These accounting adjustments are beyond the Return while Compound Annual Growth Rate

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Analysis of Economic Value Added in Different Industries 51
of the Manufacturing Sector in India
(CAGR) on the BSE Sensex since inception is deals from 1st January 2000 to 31st March 2008 in the
considered as the Rate of Return on Market. chemical industry. The chemical acquirers undertook
• For the purpose of determining the Rate of 115 related deals and 20 unrelated deals. Around eight
Return on Market, the long run BSE Sensex acquirers in the chemical industry chose a target from
averaged annualized daily return is used as proxy. the food and beverage industry, five from the
machinery industry, one from metal and metal
5.4. Statistical Tools and techniques products, one from miscellaneous manufacturing, two
Wilcoxon Signed-Rank Test, a non-parametric from non-metallic and mineral products and three
statistical test is also used in this study. It provides the from the textiles sector. There were around 87
positive and negative sign change in performance. acquirers in the chemical industry that had prior M&A
Various studies have adopted this test for pre and post experience while 48 companies did not have prior
M&A performance evaluation (Pawaskar, 2001); M&A experience. There were 105 acquirers in the
(Kawahara & Takeda, 2007); (Ma, et al., 2009); (Sinha, chemical industry that were listed and 30 acquirers
et al., 2010). In this study also Wilcoxon Signed-Rank which were not listed on the stock exchanges.
Test is used to know whether there is any difference in Considering the size of the target in relation to an
performance in the pre and post M&A period. It shows acquirer, around 117 chemical acquirers preferred
how many M&A deals have performed well and how small targets while 18 acquirers in the chemical
many M&A deals have not done well after M&A. The industry preferred large target firms to undertake
Wilcoxon signed ranked statistic W+ is defined as: deals. There were 53 large acquirers and 82 small
acquirers in the chemical industry. Cash was the mode
of payment for 69 acquirers while 66 acquirers
preferred stock.

The top five acquirers in the chemical industry that


have performed well in terms of rate of EVA on an
average of three years after M&A are Southern
10. Results and Discussion: Industry Wise Analysis of Petrochemical Industries Corporation Ltd, Smartchem
EVA Technologies Ltd and Hindustan Unilever Ltd
The industry wise analysis of economic value added (considered as three acquirers due to three
(economic profit) of the acquirer in different industries acquisitions made). Acquisitions made were SPEL
of the manufacturing sector has been described in S e m i c o n d u c t o r Ltd , N o b l e E x p l o c h e m Ltd ,
detail below: International Bestfoods Ltd, Modern Food Inds. (India)
Ltd and Vashisti Detergents Ltd. Among these five
10.1. Post M&A EVA performance in the Chemical acquirers, four are listed, four preferred cash as the
Industry mode of payment, and four have prior acquisition
The sample consists of 135 acquirers in the chemical experience. These five acquirers chose a relatively
industry that have undertaken the M&A strategy for small size target firm compared to their size. Four of
their firms. There were 37 acquisitions and 98 merger them were large acquirers in the chemical industry.

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Hindustan Unilever Ltd was successful in enhancing acquirer and yet performed well like the rest of the
performance for all its three merger deals. It had four acquirers which were listed and larger acquirers.
negative EVARatepre123 which turned to a positive But it had a positive EVA rate prior to M&A.
EVARatepost123 during the post-merger period. These
top acquirers had asset sizes between Rs 3,000 crore The following table shows the results of the Wilcoxon
and Rs 7,000 crore. Smartchem Technologies Ltd was Signed Ranks Test for acquirers in the chemical
an unlisted firm with no M&A experience; its pre-M&A industry:
asset size was less than Rs 50 crore. It was a small

Table 4: Wilcoxon Signed Ranks Test for Acquirers in the Chemical Industry

Test Statistics Negative Positive Ties Z Asymp. Sig.


Ranks Ranks (2-tailed)

EVApost3 - EVApre3 16 119 0 -7.14 (a) 0.00

EVARatepost3 - EVARatepre3 70 61 4 -0.65 (b) 0.52

EVApost2 - EVApre2 25 108 2 -6.85 (a) 0.00

EVARatepost2 - EVARatepre2 71 62 2 -2.38 (b) 0.02

EVApost123 - EVApre123 0 135 0 -10.08 (a) 0.00

EVApost12 - EVApre12 20 105 10 -7.69 (a) 0.00

EVApost1 - EVApre1 9 124 2 -8.85 (a) 0.00

EVARatepost123 - 82 49 4 -3.37(b) 0.00


EVARatepre123

EVARatepost12 - EVARatepre12 89 43 3 -3.97 (b) 0.00

EVARatepost1 - EVARatepre1 92 37 6 -3.95(b) 0.00

EVARatepre1 - EVARatepost3 54 78 3 -2.17 (a) 0.03

EVARatepre1 - EVARatepost2 50 81 4 -3.18 (a) 0.00

EVApre1 - EVApost3 119 16 0 -7.70(b) 0.00

EVApre1 - EVApost2 103 27 5 -6.64(b) 0.00

Note: (a) Based on negative ranks (b) Based on positive ranks.

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries 53
of the Manufacturing Sector in India
It was observed that both the EVARatepre123 and while ten had a positive rate of EVA except Indoco
EVARatePost123 were negative for 39 companies and both Remedies Ltd. In 2004, three firms showed no change
the EVARatepre123 and EVARatePost123 were positive for 85 in the rate of EVA before and after the M&A; five
companies. Nine acquired had positive EVARatepre123 recorded a positive change in the rate of EVA while six
but negative EVARatePost123 while three had negative recorded a negative change in the rate of EVA. In 2005,
EVARatepre123 but positive EVARatePost123. From 135 out of 21 acquirers, eight recorded a positive change in
acquirers, 49 companies improved their performance; EVA while twelve recorded a negative change in the
their EVARatePost123 was greater than the EVARatepre123. rate of EVA and one recorded no change in EVA before
However, around 82 acquirers recorded poor and after the M&A. Goa Carbon Ltd had a negative rate
performance; their EVARate Post123 was less than of EVA in the pre-M&A period but when it merged with
EVARatepre123. There was no change in the pre and post Paradeep Carbons Ltd in 2005, its negative rate of EVA
M&A EVARatepre-post123 for four acquirers. About 60% of turned positive on an average of three years after the
listed firms and 60% of unlisted firms had negative EVA M&A. Nirma Ltd, Excel Crop Care Ltd and Matrix
in the post M&A period. Laboratories Ltd had a positive rate of EVA in the pre-
M&A period but after the M&A deal, their rate of EVA
In the year 2000, 50% (five) of the acquirers had turned negative and they were the worst performers in
positive returns in terms of the EVA rate and the 2005. From the 18 acquirers in 2006, 17 had a negative
balance 50% (five) had earned negative returns in rate of EVA prior to the M&A and 16 had a negative
terms of EVA rate, but their pre and post rate of EVA rate of EVA after the M&A. Southern Petrochemical
was positive. In 2002, 22 firms opted for M&A deals in Industries Corporation Ltd is one which had a positive
the chemical industry. Out of these 22 firms, only five rate of EVA both before and after the M&A and the
firms did not perform well while the rest were change in rate of EVA was also positive. Hindustan
successful in terms of the average rate of EVA over Unilever Ltd had a negative rate of EVA before the
three years after the M&A. In 2001, the Rate of EVApre123 M&A but positive EVA after the M&A. All the acquirers
and Rate of EVApost123 was positive. In 2002, out of 14 that had done deals in the year 2007 had a negative
acquirers, 13 opted for related deals and mergers rate of EVA both before and after the M&A. The
while one acquirer selected targets from the change in the rate of EVA was positive for Southern
machinery industry and acquisition mode. In 2002, Petrochemical Industries Corporation Ltd which had
only three firms performed better compared to the undertaken an M&A deal with Mitocon Biotec Ltd;
pre-M&A period while the rest recorded negative however, it had a negative rate of EVA before and after
performance. All the acquirers in 2002 had a positive the M&A. There were only eight acquirers in 2008;
rate of EVA in the pre-M&A period while only two firms their performance did not improve in the post-M&A
recorded a negative rate of EVA in the post-M&A period. It is likely that the firms opted for M&A in the
period. In 2003, out of 11 acquirers, two firms chemical industry in 2008 as a reaction to the financial
performed well in the post-M&A period; both these crisis in 2008 but they were not able to realize a higher
firms had opted for a merger deal selecting their target return from their R&D activities. R&D is generally
from within their industry i.e. the chemical industry. 11 considered as one important area in the chemical
firms had a positive rate of EVA in the pre-M&A period industry.

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries
of the Manufacturing Sector in India
The factors affecting EVA in the chemical industry are while five which were unlisted on the stock exchanges.
not studied in this research. However, it is observed Considering the size of the target in relation to an
that most M&A deals have been done in this industry acquirer, around 22 diversified acquirers preferred
even if there are more cases of failure than success. small targets while two diversified acquirers preferred
The reasons for failures could be undertaking M&A for large targets. There were 12 large acquirers and 12
wrong reasons – to cope with increasing competition small acquirers in the diversified industry. Cash was the
and a changing environment, focusing on the short mode of payment for 14 acquirers while 10 acquirers
term benefits instead of long term growth, etc. preferred stocks.

10.1. Post M&A EVA performance in the Diversified The top five acquirers that performed well in the post
Industry M&A period were Gillanders Arbuthnot & Co. Ltd,
There were 24 acquirers in the diversified industry in Siemens Ltd (considered as two acquirers since it made
the entire sample of firms that adopted the M&A two acquisitions), Clariant Chemicals (India) Ltd and
strategy. There were six acquisitions and 18 merger Salzer Electronics Ltd. Acquisitions made were
deals from 1st January 2000 to 31st March 2008 in the Tengpani Tea Co. Ltd, Siemens V D O Automotive Ltd,
diversified industry. Since the acquirers were Flender Ltd, Vanavil Dyes & Chemicals Ltd and Salzer
diversified firms, all opted for M&A deals in unrelated Controls Ltd. All of these were merger deals and the
industries. Around six diversified acquirers chose a acquiring companies had targets that were smaller in
target from the chemical industry, four from the food size than them. Gillanders Arbuthnot & Co. Ltd
and beverage industry, six from the machinery acquired Waldies Ltd in 2006 but didn't do well;
industry, two from transport equipment, two from however, after the deal in 2008, it performed well.
miscellaneous manufacturing and four from the
textiles industry. There were around 13 diversified The following table shows the results of the Wilcoxon
acquirers that had prior M&A experience while 11 Signed Ranks Test for acquirers in the diversified
companies did not have prior M&A experience. There industry:
were 19 listed acquirers in the diversified industry

Table 5: Wilcoxon Signed Ranks Test for acquirer in the Diversified Industry

Test Statistics Negative Positive Ties Z Asymp. Sig.


Ranks Ranks (2-tailed)

EVApost3 - EVApre3 15 9 0 -2.44 (a) 0.01

EVARatepost3 - EVARatepre3 8 16 0 -2.14 (b) 0.03

EVApost2 - EVApre2 19 5 0 -1.89 (a) 0.06

EVARatepost2 - EVARatepre2 13 11 0 -0.86(b) 0.39

EVApost123 - EVApre123 1 23 0 -4.16 (b) 0.00

EVApost12 - EVApre12 18 6 0 -2.31 (a) 0.02

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries 55
of the Manufacturing Sector in India
Test Statistics Negative Positive Ties Z Asymp. Sig.
Ranks Ranks (2-tailed)

EVApost1 - EVApre1 14 9 1 -1.25 (a) 0.21

EVARatepost123 - EVARatepre123 16 7 1 -1.83 (a) 0.07

EVARatepost12 - EVARatepre12 16 8 0 -1.10 (a) 0.27

EVARatepost1 - EVARatepre1 16 7 1 -1.58 (a) 0.11

EVARatepre1 - EVARatepost3 9 15 0 -1.33 (b) 0.18

EVARatepre1 - EVARatepost2 8 16 0 -1.61 (b) 0.11

EVApre1 - EVApost3 6 18 0 -3.52 (b) 0.00

EVApre1 - EVApost2 4 17 3 -1.86 (b) 0.06

Note: a. Based on positive ranks. b. Based on negative ranks

The average performance of all the sample acquirers the year just before M&A and three years after M&A,
turned from a positive rate of pre-M&A EVA (0.09) to a this industry has brought positive change in EVA for 18
negative rate of post-M&A EVA (-0.02) with a 11% acquirers. The diversified industry's venture into M&A
change in the post-M&A period. There were more was unsuccessful probably because the target
firms with negative rate of EVA in the pre-M&A (16 companies were from an industry that did not match
firms) than those with a positive rate of EVA (seven the degree of diversification required by the firms.
firms). In case of M&A deals in the year 2000, two
deals made positive changes in EVA while one deal had 10.3. Post M&A EVA performance in the Food and
a negative change in EVA. The rate of EVA of M&A Beverage Industry
deals done in the year 2003 had positive values in both There were 56 acquirers in the food and beverage
the pre and post M&A periods, but the change in the industry in the sample of firms that had adopted an
rate of EVA of three firms was negative. In 2004, two M&A strategy. There were 17 acquisitions and 39
unrelated merger deals were done; both the deals merger deals from 1st January 2000 to 31st March 2008
earned positive rate of EVA. The three merger deals in the food and beverage industry. The food and
and one acquisition deal that were done in the year beverage acquirers opted for 45 related deals and 11
2005 brought a negative change in the EVA. Two deals unrelated deals. Around five food and beverage
of 2006 and four deals of 2007 earned negative change acquirers chose a target from the chemical industry,
in the rate of EVA after M&A. The three merger deals one from the diversified industry, five from the
in 2008 could realize positive change in the rate of EVA machinery industry, two from miscellaneous
while one acquisition that was done in 2008 was a manufacturing, two from non-metallic and mineral
negative change in the rate of EVA. For acquirers in the products and three from the textiles industry. There
diversified industry, M&A deals were done to reduce were around 25 acquirers in the food and beverage
costs and improve efficiencies through various sources industry that had prior M&A experience while 31
of business. If the performance is compared between companies did not have prior M&A experience. There

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries
of the Manufacturing Sector in India
were 33 food and beverage acquirers that were listed merged with Johnson Pedder Ltd. in 2000, ITC Ltd
while 23 were not listed on the stock exchanges. merged with ITC Bhadrachalam Paperboards Ltd. in
Considering the size of the target in relation to the 2001 and Godrej Agrovet Ltd acquired Goldmohur
acquirer, around 49 food and beverage acquirers Foods & Feeds Ltd in 2001.The top performers in this
preferred small targets while seven acquirers in the industry could achieve more than 50% change in the
chemical industry preferred large size target firms. rate of EVA even if they had a negative rate of EVA in
There were 16 large acquirers and 40 small acquirers in the pre-M&A period. All firms with negative rate of
the food and beverage industry. Cash was the mode of EVA converted their performance into a positive EVA
payment for 29 acquirers while 27 acquirers preferred rate. Out of the 56 acquirers, 40 acquirers (around 80%
stock as a method of payment. of the sample companies) achieved a positive rate of
EVA.
The top performing M&A deals were -- SSF Ltd merged
with East Coast Marine Products Pvt. Ltd in 2000, The following table shows the results of the Wilcoxon
Shaw Wallace Distilleries Limited merged with Signed Ranks Test for acquirers in the food and
Pampasar Distillery Ltd in 2000, EID-Parry (India) Ltd beverage industry:

Table 6: Wilcoxon Signed Ranks Test for acquirer in the Food and Beverage Industry
Test Statistics Negative Positive Ties Z Asymp. Sig.
Ranks Ranks (2-tailed)

EVApost3 - EVApre3 11 40 5 -5.25(a) 0.00

EVARatepost3 - EVARatepre3 8 48 0 -5.49 (a) 0.00

EVApost2 - EVApre2 13 42 1 -5.08 (a) 0.00

EVARatepost2 - EVARatepre2 12 43 1 -4.59 (a) 0.00

EVApost123 - EVApre123 0 56 0 -6.51 (a) 0.00

EVApost12 - EVApre12 14 42 0 -4.63 (a) 0.00

EVApost1 - EVApre1 15 41 0 -4.76 (a) 0.00

EVARatepost123 - EVARatepre123 16 40 0 -2.72 (a) 0.01

EVARatepost12 - EVARatepre12 23 31 2 -1.84 (a) 0.07

EVARatepost1 - EVARatepre1 25 31 0 -0.47 (a) 0.64

EVARatepre1 - EVARatepost3 30 25 1 -1.80 (b) 0.07

EVARatepre1 - EVARatepost2 39 17 0 -2.86 (b) 0.00

EVApre1 - EVApost3 52 4 0 -5.70 (b) 0.00

EVApre1 - EVApost2 40 15 1 -4.04 (b) 0.00

Note: a. Based on negative ranks. b. Based on positive ranks.

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries 57
of the Manufacturing Sector in India
There were 45 acquirers that had negative rate of EVA from miscellaneous manufacturing, one from non-
in the pre-M&A period while 26 firms had negative rate metallic and mineral products, one from the textile
of EVA in the post-M&A period. There were 19 firms industry and four from the transport industry. There
that had negative EVA in both the pre and post M&A were around 28 acquirers in the machinery industry
periods while five had positive rate of EVA in both the that had prior M&A experience while 23 companies
pre and post M&A periods. Five acquirers had negative did not have prior M&A experience. There were 32
EVA in both the pre and post M&A periods but the acquirers in the machinery industry that were listed
percentage change in the rate of EVA was positive in while 19 were not listed on the stock exchanges.
the post-M&A period. There was a higher positive Considering the size of the target in relation to the
change in the rate of EVA in EVARatepost123 than in acquirer, around 48 acquirers in the machinery
EVARatepre123 for 40 acquirers which indicates that in industry preferred small targets while three acquirers
this industry, the performance is better in terms of preferred large size target firms. There were 17 large
EVA. The year-wise performance of the food and acquirers and 34 small acquirers in the machinery
beverage industry might have also been affected by industry. Cash was the mode of payment for 30
various economic environment factors like price acquirers while 21 acquirers preferred stock.
inflation, increase in energy and commodity costs, hike
in interest rates, easy access to funds and availability of The top performers as acquirers in this industry were
favourable buy and sell terms, and consumer spending AdorPowertron Ltd, Akar Tools Ltd, Astra Microwave
or buying habits. Products Ltd, Atlas Copco (India) Ltd and Bajaj
Electricals Ltd. Acquisitions made were Trans
10.4. Post M&A EVA performance in the Machinery Electronics Ltd, Ajanta Auto Inds. Pvt. Ltd. [Merged],
Industry Astra Microelectronic Technologies Ltd, [Merged],
There were 51 acquirers in the machinery industry in Chicago Pneumatic India Ltd. [Merged] and Hind
the sample that adopted an M&A strategy. There were Lamps Ltd. The deal between Wellwin Industry Ltd and
st
12 acquisitions and 39 merger deals from 1 January Alcaste India Ltd did not bring about a positive change
st
2000 to 31 March 2008 in the machinery industry. in the rate of EVA and thus become the worst
Machinery acquirers opted for 34 related deals and 17 performer.
unrelated deals. One machinery acquirer chose a
target from the chemical industry, one from the The following table shows the results of the Wilcoxon
diversified industry, one from the food and beverage Signed Ranks Test for acquirers in the machinery
industry, seven from metal and metal products, one industry:

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries
of the Manufacturing Sector in India
Table 7: Wilcoxon Signed Ranks Test for acquirers in the Machinery Industry

Test Statistics Negative Positive Ties Z Asymp. Sig.


Ranks Ranks (2-tailed)

EVApost3 - EVApre3 29 22 0 -0.45 (a) 0.65

EVARatepost3 - EVARatepre3 24 26 1 -1.75 (b) 0.08

EVApost2 - EVApre2 22 28 1 -1.31 (a) 0.19

EVARatepost2 - EVARatepre2 33 17 1 -2.67 (b) 0.01

EVApost123 - EVApre123 0 51 0 -6.22 (a) 0.00

EVApost12 - EVApre12 14 37 0 -2.64 (a) 0.01

EVApost1 - EVApre1 11 39 1 -3.35 (a) 0.00

EVARatepost123 - EVARatepre123 31 19 1 -2.42 (b) 0.02

EVARatepost12 - EVARatepre12 38 13 0 -3.91 (b) 0.00

EVARatepost1 - EVARatepre1 36 14 1 -3.00 (b) 0.00

EVARatepre1 - EVARatepost3 26 25 0 -0.44 (a) 0.66

EVARatepre1 - EVARatepost2 23 28 0 -0.68 (a) 0.50

EVApre1 - EVApost3 30 21 0 -2.51 (b) 0.01

EVApre1 - EVApost2 28 23 0 -1.43 (b) 0.15

Note: a. Based on negative ranks. b. Based on positive ranks.

The average rate of EVA for all the companies' pre and post M&A periods. Likewise, there were 11
performance declined by 10% from the pre-M&A rate acquirers where the change in the rate of EVA was
of EVA of -0.02 to the post-M&A rate of EVA of -0.11. positive even though there was a negative rate of EVA
For acquisition deals, the rate of decline was by two in both pre and post M&A periods.
percent while for merger deals, the rate of decline was
by 12%. About 25 acquirers had a negative rate of EVA 10.5. Post M&A EVA performance in the Metal and
in the pre-M&A period while 32 acquirers had a Metal Products Industry
negative rate of EVA in the post-M&A period. About 24 There were 41 acquirers in the metal and metal
acquirers had a negative rate of EVA in both pre and products industry in the sample that had adopted an
post M&A periods and 19 had a positive rate of EVA in M&A strategy. There were 14 acquisitions and 27
both pre and post M&A periods. In case of 11 merger deals from 1st January 2000 to 31st March 2008
acquirers, the change in the rate of EVA was negative in the metal and metal products industry. The metal
even though there was a positive rate of EVA in both and metal products acquirers opted for 33 related

Performance of Acquirer in the Manufacturing Sector:


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Volume XXXI August 2016
Analysis of Economic Value Added in Different Industries 59
of the Manufacturing Sector in India
deals and eight unrelated deals. One metal and metal that acquired India Foils Ltd in 2008, Sundaram-
products industry acquirer chose a target from the Clayton Ltd that acquired Auto (India) Engineering Ltd
chemical industry, two from the machinery industry, in 2008, Steel Authority of India Ltd that acquired Steel
two from miscellaneous manufacturing, two from Complex Ltd in 2008, JSW Steel Ltd that acquired

transport equipment and one from the textiles Southern Iron & Steel Co. Ltd in 2007, and Interfit

industry. There were around 26 metal and metal firms Techno Products Ltd that acquired Interfit India Ltd in
2007. The worst performance was by the acquirer
that had prior M&A experience while 15 companies
Manaksia Ltd that undertook a merger deal with Spark
did not have prior M&A experience. There were 33
Exports Ltd in 2005. It was an unrelated deal. The
acquirers in the metal and metal products industry
business cycle and inventories are two important
that were listed while eight acquirers were not listed
factors in the metal industry. Apart from these, other
on the stock exchanges. Considering the size of the
factors that influence the industry are changes in
target in relation to the acquirer, around 34 metal and
metals production, strategic stockpiling, foreign
metal products acquirers preferred small targets while
exchange rates, speculation and production costs¹.
seven preferred large targets. There were 20 large
These factors, apart from M&A, would have made
acquirers and 21 small acquirers in the metal and these companies good or poor performers in the metal
metal products industry. Cash was the mode of and metal products industry.
payment for 18 acquirers while 23 acquirers preferred
stock as the mode of payment. The following table shows the results of the Wilcoxon
Signed Ranks Test for acquirers in the metal and metal
The top acquirers in terms of change in the rate of EVA products industry:
in the post-M&A period were Ess Dee Aluminium Ltd

Table 8: Wilcoxon Signed Ranks Test for acquirers in the Metal and Metal Products Industry

Test Statistics Negative Positive Ties Z Asymp.


Ranks Ranks Sig. (2-
tailed)

EVApost3 - EVApre3 24 17 0 -0.54 (a) 0.59

EVARatepost3 - EVARatepre3 29 12 0 -2.75 (a) 0.01

EVApost2 - EVApre2 28 13 0 -0.36 (a) 0.72

EVARatepost2 - EVARatepre2 24 17 0 -1.20 (a) 0.23

EVApost123 - EVApre123 0 41 0 -5.58 (b) 0.00

EVApost12 - EVApre12 24 15 2 -0.10 (b) 0.92

EVApost1 - EVApre1 16 24 1 -0.87 (b) 0.39

¹Source: Metal Industries Indicators, http://minerals.usgs.gov/minerals/pubs/mii/1201/miijan12.pdf

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries
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Test Statistics Negative Positive Ties Z Asymp.
Ranks Ranks Sig. (2-
tailed)

EVARatepost123 - EVARatepre123 21 18 2 -1.54 (a) 0.12

EVARatepost12 - EVARatepre12 20 21 0 -1.10 (a) 0.27

EVARatepost1 - EVARatepre1 26 15 0 -1.15 (a) 0.25

EVARatepre1 - EVARatepost3 16 25 0 -0.79 (b) 0.43

EVARatepre1 - EVARatepost2 16 24 1 -1.12 (b) 0.26

EVApre1 - EVApost3 16 22 3 -0.99 (a) 0.32

EVApre1 - EVApost2 16 25 0 -0.22 (b) 0.83

Note: a. Based on positive ranks. b. Based on negative ranks.

The average performance of all the companies in this 2003, five had a negative change in the rate of EVA and
industry declined by seven percent from the pre-M&A two had a positive change in the rate of EVA although
rate of EVA of 0.24 to the post-M&A rate of EVA of - both in the pre and post M&A periods had a positive
0.17. There were five acquirers that had negative rate of EVA. There are six deals in 2004, five deals in
values of rate of EVA in the pre-M&A period, out of 2005 and four deals in 2006 that had a positive rate of
which two had a negative rate of EVA in the post-M&A EVA in the pre-M&A period but had a negative change
period and three had positive rate of EVA; there was a in the rate of EVA. The performance turned better in
positive change in EVA for all the five acquiring firms. 2007 and 2008 when the change in the rate of EVA was
There were 12 acquirers that had a positive rate of EVA positive for all the six acquirers in 2007 and three
in the pre-M&A period but negative rate of EVA in the acquirers in 2008.
post-M&A period with a 39% decline in performance
on average. There were three firms that had a positive 10.6. Post M&A E VA performance in the
rate of EVA and two firms had a negative rate of EVA in Miscellaneous Manufacturing Industry
both pre and post M&A periods. There were nine acquirers in the miscellaneous
manufacturing industry in the whole sample that
In the year 2000, one merger and one acquisition deal adopted an M&A strategy. There were four
were done in this industry; both increased the rate of acquisitions and five merger deals from 1st January
EVA by one percent in the post-M&A period. Similarly 2000 to 31 st March 2008 in the miscellaneous
in 2001, two deals were done which resulted in a manufacturing industry. The miscellaneous
positive change in EVA. In 2002, six M&A deals were manufacturing acquirers opted for eight related deals
done, out of which all had a better rate of EVA except and one unrelated deal. One acquirer in the
Interfit India Ltd that acquired Interfit Techno Products miscellaneous manufacturing industry chose a target
Ltd, which turned its positive pre-M&A rate of EVA to a from metal and metal products and the rest of the
negative rate of EVA. Out of the seven deals done in acquirers chose targets from miscellaneous

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries 61
of the Manufacturing Sector in India
manufacturing. There were around six acquirers in the large size targets. There was one large acquirer and
miscellaneous manufacturing industry that had prior eight small acquirers in the miscellaneous
M&A experience while three companies did not have manufacturing industry. Cash was the preferred mode
prior M&A experience. There were seven acquirers in of payment for five acquirers while four acquirers
the miscellaneous manufacturing industry that were preferred stock as the mode of payment.
listed while two were not listed on the stock
exchanges. Considering the size of the target in The following table shows the results of the Wilcoxon
relation to the acquirer, around seven acquirers Signed Ranks Test for acquirers in the miscellaneous
preferred small targets while two acquirers preferred industry:

Table 9: Wilcoxon Signed Ranks Test for acquirers in the Miscellaneous Industry

Test Statistic Negative Positive Ties Z Asymp. Sig.


Ranks Ranks (2-tailed)

EVApost3 - EVApre3 7 2 0 -0.89 (a) 0.37

EVARatepost3 - EVARatepre3 4 4 1 -0.14 (b) 0.89

EVApost2 - EVApre2 5 4 0 -0.42 (a) 0.68

EVARatepost2 - EVARatepre2 3 6 0 -0.30(b) 0.77

EVApost123 - EVApre123 0 9 0 -2.67 (b) 0.01

EVApost12 - EVApre12 4 5 0 -0.30 (a) 0.77

EVApost1 - EVApre1 4 5 0 -0.89 (b) 0.37

EVARatepost123 - EVARatepre123 6 3 0 -0.30 (a) 0.77

EVARatepost12 - EVARatepre12 6 3 0 -1.25 (a) 0.21

EVARatepost1 - EVARatepre1 5 4 0 -0.77 (a) 0.44

EVARatepre1 - EVARatepost3 5 4 0 -0.24(a) 0.81

EVARatepre1 - EVARatepost2 5 4 0 -0.06 (a) 0.95

EVApre1 - EVApost3 4 5 0 -0.30 (a) 0.77

EVApre1 - EVApost2 3 4 2 -0.51 (b) 0.61

Note: a. Based on positive ranks. b. Based on negative ranks.

The pre-M&A rate of EVA was negative for two firms while three had a negative change in the rate of EVA. In
but both the companies had a positive rate of EVA in case of one acquirer, there was no change in the rate of
the post-M&A period and the change in the rate of EVA EVA before and after the M&A. The top performer was
from pre to post M&A period was also positive. Six Nova Corporation Ltd which acquired Nova Iron &
acquiring firms had a positive change in the rate of EVA Steel Ltd. Even though it was a small unlisted acquirer

Performance of Acquirer in the Manufacturing Sector:


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Analysis of Economic Value Added in Different Industries
of the Manufacturing Sector in India
and it made an unrelated acquisition deal with the acquirers preferred small targets while three non-
large size target, and had no prior M&A experience, metallic and mineral products acquirers preferred
the combined firm was successful in turning the large targets. There were 15 large acquirers and ten
negative rate of EVA(-0.20) to a positive rate of small acquirers in the non-metallic and mineral
EVA(0.45) with a 65% change in the rate of EVA. The products industry. Cash was the preferred mode of
worst performer was West Coast Paper Mills Ltd (large payment for 14 acquirers while 11 acquirers preferred
size listed acquirer) that had acquired two target firms; stock.
one in 2002 was Specialty Coatings & Laminations Ltd
(small target) and another in 2003 was Rama The acquirers which recorded top performance were
Newsprint & Papers Ltd (large target). Both were cash Chettinad Cement Corpn. Ltd, ACC Ltd. (considered as
deals. The acquirer failed probably because it made two acquirers since it made two acquisitions) and
deals in two consecutive years without being able to Ambuja Cements Ltd. They acquired High-Tech Lime
properly integrate the activities of the target firms. Products Ltd & Sabari Cements (Chennai) Ltd, Tarmac
Again it had opted for a small target firm and then went (India) Pvt. Ltd. [Merged] & Shiva Cement Ltd, Ambuja
for a large target with the confidence that it would be Cement Eastern Ltd. [Merged]. All of them were large
able to create synergy, but in the end, it failed. listed acquirers, opted for related merger deals with
relatively small size target firms during the years 2006
10.7. Post M&A EVA performance in the Non- and 2007. Four of the deals were done in the year 2006
Metallic and Mineral Products Industry through mergers. The worst performance was by India
There were 25 acquirers in the non-metallic and Cements Ltd which acquired Sri Vishnu Cement Ltd. in
mineral products industry in the whole sample that 2000. Ambuja Cements Ltd that ACC Ltd in 2000 and
adopted an M&A strategy. There were six acquisitions Ambuja Cement Rajasthan Ltd. [Merged] in 2002 had a
st st
and 19 merger deals from 1 January 2000 to 31 negative rate of EVA, but in 2006 it became successful
March 2008 in the non-metallic and mineral products in the merger deals with Ambuja Cement Eastern Ltd.
industry. The non-metallic and mineral products [Merged]. This reflects that past M&A failure had
acquirers opted for 22 related deals and three made the company cautious. The company made a
unrelated deals. Around two targets were chosen from thorough investigation into the target company's
the diversified industry, twenty two from non-metallic activities which helped it improve performance in
and mineral products and three from the textiles terms of the rate of EVA. The top performers improved
industry. There were around 17 non-metallic and their rate of EVA by more than 50% in the post-M&A
mineral products acquirers that had prior M&A period.
experience while eight companies did not have prior
M&A experience. All the acquired companies in the The following table shows the results of the Wilcoxon
non-metallic and mineral products industry were Signed Ranks Test for acquirers in the non-metallic and
listed on the stock exchanges. Considering the size of mineral products industry:
the target in relation to the acquirer, around 22

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Analysis of Economic Value Added in Different Industries 63
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Table 10: Wilcoxon Signed Ranks Test for acquirers in the Non-Metallic and Mineral Products Industry

Test Statistics Negative Ranks Positive Ranks Ties Z Asymp. Sig.


(2-tailed)

EVApost3 - EVApre3 8 16 1 -1.98 (a) 0.05

EVARatepost3 - EVARatepre3 5 20 0 -2.71 (a) 0.01

EVApost2 - EVApre2 7 18 0 -1.71 (a) 0.09

EVARatepost2 - EVARatepre2 3 22 0 -3.51 (a) 0.00

EVApost123 - EVApre123 0 25 0 -4.37 (a) 0.00

EVApost12 - EVApre12 7 18 0 -2.76 (a) 0.01

EVApost1 - EVApre1 7 17 1 -2.44 (a) 0.01

EVARatepost123 - EVARatepre123 5 20 0 -3.15 (a) 0.00

EVARatepost12 - EVARatepre12 6 19 0 -3.19 (a) 0.00

EVARatepost1 - EVARatepre1 9 16 0 -2.18 (a) 0.03

EVARatepre1 - EVARatepost3 18 6 1 -2.37 (b) 0.02

EVARatepre1 - EVARatepost2 13 12 0 -1.36 (b) 0.17

EVApre1 - EVApost3 19 5 1 -2.80 (b) 0.01

EVApre1 - EVApost2 14 8 3 -1.85 (b) 0.06

Note: a. Based on negative ranks. b. Based on positive ranks.

The change in the rate of EVA was positive for 20 years 2003, 2004, 2005, 2006, 2007 and 2008 recorded
acquirers. The pre-M&A rate of EVA was negative for a positive change in the rate of EVA post-M&A. There
ten acquirers, which turned positive in the post-M&A were eight deals done in 2006 which had a negative
period. There were five acquirers that had a positive pre-M&A rate of EVA for the acquirer, but after the
rate of EVA in both the pre and post M&A periods but M&A, the EVA turned positive and the overall change
their performance declined and the change in the rate resulted in them being in the top four acquirers in the
of EVA was negative. terms of performance measured by the rate of EVA.

M&A deals made in the year 2000 brought a negative 10.8. Post M&A EVA performance in Textiles Industry
change in the rate of EVA even if companies had a The textile Industry is one of the oldest industries in
positive rate of EVA in both the pre and post M&A the manufacturing sector in India. There were 36
periods. They were small size listed acquirers. Two acquirers in the textile industry in the complete sample
deals in 2001 recorded a positive change in EVA that adopted an M&A strategy. There were ten
through M&A. Two deals in 2002 recorded a negative acquisitions and 26 merger deals from 1st January 2000
change in the rate of EVA. The M&A deals done in the to 31st March 2008 in the textile industry. The textile

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Analysis of Economic Value Added in Different Industries
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acquirers opted for 28 related deals and eight invested money in M&A so that they could benefit
unrelated deals. About eight textile acquirers chose a through a target firm that had better, integrated
target from the food and beverage industry, five from design, process and manufacturing facilities.
the machinery industry, one from metal and metal
products, one from miscellaneous manufacturing, two The top acquirers in the textile industry were Grasim
from non-metallic and mineral products and three Industries Ltd that acquired Harish Cement Ltd, Om
from the textiles industry. There were around 18 Cotex Ltd, Jessop & Co. Ltd that acquired Jaybharat
acquirers in the textile industry that had prior M&A Textiles & Real Estate Ltd that acquired Asahi industries
experience while 18 companies did not have prior Ltd, RSWM Ltd that acquired Indus Clothing Ltd, Precot
M&A experience. There were 27 acquirers in the Meridian Ltd that acquired Meridian Industries Ltd.
textile industry that were listed while nine acquirers The top four of the acquiring firms used acquisition
were not listed on the stock exchanges. Considering rather than the merger strategy. The deals were done
the size of the target in relation to the acquirer, around during the years 2005 to 2007. The top two preferred
32 acquirers in the textile industry preferred small the target firm from an unrelated industry while the
targets while four acquirers preferred large targets. rest of the three opted for targets from a related
Cash was the preferred mode of payment for 18 industry. Grasim Industries Ltd that ranked first is a
acquirers while 18 acquirers preferred stock. listed large acquirer that chose a small size target firm
relative to its size, and had prior M&A experience,
There were 25 large acquirers and 11 small acquirers in made an unrelated deal with cash as the mode of
the textile industry. It implies 70% of the large textile payment. It recorded a successful performance for the
firms decided to grow through an inorganic growth deal in 2006 with Harish Cement Ltd. Another
strategy. The acquirer firms in the textile industry interesting finding is that it didn't do well when it
considered M&A to be a rational approach to integrate acquired Dharani Cements Ltd in 2000. It was a merger
operational activities and build the value chain. The deal with stock as the mode of payment with an
acquirers in the textile industry opted for M&A to gain unrelated target firm. The company's experience in
large orders specifically by joining target firms and M&A increased with a greater number of M&A deals,
entering within their customers' reference and which resulted in it becoming successful in 2006.
market. The motive behind these large sized
companies was specifically to increase capacities The following table shows the results of the Wilcoxon
consistently so that they were able to supply in time to Signed Ranks Test for acquirers in the textile industry:
meet the growing demand for their products. They

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Analysis of Economic Value Added in Different Industries 65
of the Manufacturing Sector in India
Table 11: Wilcoxon Signed Ranks Test for acquirers in the Textiles Industry

Test Statistics Negative Positive Ties Z Asymp. Sig.


Ranks Ranks (2-tailed)

EVApost3 - EVApre3 21 14 1 -3.00 (a) 0.00

EVARatepost3 - EVARatepre3 10 26 0 -3.87 (b) 0.00

EVApost2 - EVApre2 20 16 0 -1.46 (a) 0.14

EVARatepost2 - EVARatepre2 14 22 0 -1.57 (b) 0.12

EVApost123 - EVApre123 0 36 0 -5.23 (b) 0.00

EVApost12 - EVApre12 26 9 1 -1.27 (a) 0.20

EVApost1 - EVApre1 27 9 0 -1.10 (a) 0.27

EVARatepost123 - EVARatepre123 7 29 0 -3.31 (b) 0.00

EVARatepost12 - EVARatepre12 15 21 0 -2.10 (b) 0.04

EVARatepost1 - EVARatepre1 16 20 0 -1.19 (b) 0.23

EVARatepre1 - EVARatepost3 26 10 0 -3.71 (a) 0.00

EVARatepre1 - EVARatepost2 24 12 0 -2.29 (a) 0.02

EVApre1 - EVApost3 21 15 0 -0.82 (a) 0.41

EVApre1 - EVApost2 15 21 0 -0.65 (b) 0.51

Note: a. Based on positive ranks.b. Based on negative ranks.

The average performance of all the sample firms in the capital in 2000 and 2001 might have been higher. In
textile industry improved by 33% from the pre-M&A 2000, interest rates were at an all-time high, which
rate of EVA (-0.07) to the post-M&A rate of EVA (0.25). increased the cost of debt². There was one deal in 2002
Around 90% of the sample firms had a negative rate of which turned a positive rate of EVA to a negative rate
EVA in the pre-M&A period and 3% in the post-M&A of EVA post-M&A. There were three deals in 2003, six
period. About 97% of the sample firms had a positive deals in 2004, six deals in 2005, eight deals in 2006, five
rate of EVA and change in EVA was positive for all the deals in 2007 and one deal in 2008; all of them resulted
firms. in a positive change in the rate of EVA in the post-M&A
period. From 2003 to 2008, the rate of EVA recorded
In the year 2000, three deals were done in this better performance in the textile industry. Out of the
industry; all three were failures and of these, two were 29 deals during 2003 to 2008, 24 (83%) acquirers
the worst performers. In 2001, three deals were done; turned their negative rate of EVA to a positive rate of
all of them were the worst performers. The cost of EVA in the post-M&A year.

“The benchmark interest rate in India was last recorded at 8 percent. Interest rate in India is reported by the Reserve Bank of India. Historically, from 2000 until
2012, the Indian interest rate averaged 6.5 percent reaching an all time high of 14.5 percent in August of 2000 and a record low of 4.3 percent in April of 2009.”
source: http://www.tradingeconomics.com/india/interest-rate

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10.9. Post M&A EVA performance in the Transport for the M&A deal while 15 acquirers preferred stock as
Equipment Industry the mode of payment.
There were 30 acquirers in the transport equipment
industry in the entire sample that adopted an M&A The top acquirers in the transport equipment industry
strategy. There were 11 acquisitions and 19 merger were Motherson Sumi Systems Ltd, Federal-Mogul
st st
deals from 1 January 2000 to 31 March 2008 in the Goetze (India) Ltd, Mahindra & Mahindra Ltd
transport equipment industry. The transport (considered as two acquirers since it made two
equipment acquirers opted for 20 related deals and 10 acquisitions) and Amtek Auto Ltd. Acquisitions made
unrelated deals. An acquirer chose a target from the were Motherson Auto Components Engg. Ltd, Eco
diversified industry, four from the machinery industry, Auto Component Ltd, Swaraj Automotives Ltd, Swaraj
five from metal and metal products and 20 from the Engines Ltd and Amtek Siccardi (India) Ltd. All of them
transport equipment industry. There were around 19 were listed firms. Four of them made cash mode of
acquirers in the transport equipment industry that had payment for the deals, made related deals, and four of
prior M&A experience while 11 companies did not them were large acquirers. All of them chose small
have prior M&A experience. There were 25 acquirers target firms. Four of the firms had prior M&A
in the transport equipment industry that were listed experience. The worst performer was Coventry Spring
while five acquirers were not listed on the stock & Engg. Co. Ltd., which acquired a stake in Coventry
exchanges. Considering the size of the target in Coil-O-Matic (Haryana) Ltd in 2002.
relation to the acquirer, all the transport equipment
acquirers preferred small size targets rather than large The following table shows the results of the Wilcoxon
targets. There were 18 large acquirers and 12 small Signed Ranks Test for acquirers in the transport
acquirers in the transport industry. There were 15 equipment industry:
acquirers who preferred cash as the mode of payment

Table 12: Wilcoxon Signed Ranks Test for acquirers in the Transport Equipment Industry

Test Statistics Negative Positive Ties Z Asymp.


Ranks Ranks Sig. (2-
tailed)

EVApost3 - EVApre3 12 18 0 -1.62 (a) 0.11

EVARatepost3 - EVARatepre3 14 15 1 -0.29 (b) 0.77

EVApost2 - EVApre2 12 18 0 -1.08 (a) 0.28

EVARatepost2 - EVARatepre2 16 12 2 -0.64 (b) 0.52

EVApost123 - EVApre123 0 30 0 -4.78 (a) 0.00

EVApost12 - EVApre12 8 21 1 -1.89 (a) 0.06

EVApost1 - EVApre1 6 20 4 -1.81 (a) 0.07

EVARatepost123 - EVARatepre123 21 8 1 -2.25 (b) 0.02

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Analysis of Economic Value Added in Different Industries 67
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Test Statistics Negative Positive Ties Z Asymp.
Ranks Ranks Sig. (2-
tailed)

EVARatepost12 - EVARatepre12 21 8 1 -2.25 (b) 0.02

EVARatepost1 - EVARatepre1 25 4 1 -3.62 (b) 0.00

EVARatepre1 - EVARatepost3 8 22 0 -2.96 (a) 0.00

EVARatepre1 - EVARatepost2 7 22 1 -2.26 (a) 0.02

EVApre1 - EVApost3 17 13 0 -0.98 (b) 0.33

EVApre1 - EVApost2 18 12 0 -0.27 (b) 0.79

Note: a. Based on negative ranks .b. Based on positive ranks.

The pre-M&A EVA was negative for all the acquirers in equipment industry in the year 2002 and all of them
the transport equipment industry. The post-M&A rate failed post-M&A in terms of rate of EVA. These firms
of EVA was positive for only one company, which was a were the worst performers among all acquirers within
good performer, Motherson Sumi Systems Ltd. Eight the sample. All three deals done in the year 2003, two
companies had a positive change in the rate of EVA deals in 2004 and one deal done in 2005 could not
post-M&A while 21 companies failed to earn profits create any positive change in the rate of EVA. There
compared to their cost of capital. But when were seven (23%) deals done in the year 2006; among
performance was observed in the year pre-M&A and in them, one deal was in the top performance list and two
the third year post-M&A, 22 companies were were worst performers. Seven firms had negative EVA
successful with positive change in the rate of EVA. in pre and post M&A periods, out of which two firms
had a positive change in EVA. There were also seven
There were two M&A deals made in the year 2002; deals in 2007 of which two were in the good
both of them were successful as they brought a performance list and one in the worse performance
positive change in average EVA of three years post- list. These acquirers also had negative EVA in both pre
M&A. A significant finding was that two acquirers i.e. and post M&A periods. In 2008, four deals were done
Motherson Sumi Systems Ltd and Federal-Mogul in this industry out of which three merger deals were
Goetze (India) Ltd were large listed companies, which done by Amtek Auto Ltd acquiring Amtek Ring Gears
bought target companies from the same industry, i.e. Ltd, Amtek India Ltd and Ahmednagar Forgings Ltd;
the textile industry. There was only one deal in 2001 in another was Mahindra & Mahindra Ltd merging with
the sample. The acquiring company had a negative Punjab Tractors Ltd. Amtek Auto Ltd was unable to
EVA in both pre and post M&A periods; however, there earn a positive rate of EVA post-M&A while Mahindra
was a positive change in the rate of EVA by four per & Mahindra Ltd was able to create a positive change in
cent. There were three M&A deals in the transport the rate of EVA.

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Analysis of Economic Value Added in Different Industries
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11. Conclusion: done by manufacturing companies in India. So, the
Economic value added(another term for this metric is study has important managerial implications. It shows
Economic profit) is considered as a stringent measure the EVA performance of manufacturing companies
since it shows the earnings after taking into after adopting the M&A strategy, thereby allowing
consideration the cost of capital that is deducted from managers to understand the true performance of their
the net operating profits created by the firm. From the companies in terms of M&A success or failure. Thus
above analysis, it is found that most companies have managers should give more importance to their
negative EVA, which implies that companies were not company's EVA position rather than traditional
able to cope with this strict measure and they were not measures of performance. It indicates which industry
able to earn more than the cost of capital compared to does better in terms of EVA by undertaking an M&A
the amount of capital added into the business. deal. It facilitates the companies in improving their
Companies divested capital from their business for strategy and planning, and helps an organization
investing in M&A but they were not able to cover the review and revisit its strategy and approach and to
cost of capital. There are mixed results for different further improve on key areas.
industries. The study is carried out for acquirer firms in
the manufacturing sector in India that opted for M&A 13. Limitation and Future Scope of Study
deals with target firms that also belong to the The study does not explain the factors that could have
manufacturing sector in India, thus potentially limiting affected the EVA in different industries. Thus, there
the generalizability of the results across different are ample opportunities for future research to look
sectors or different countries. into the various factors that affect the EVA and hence,
the M&A in different industries. The current study is
12. Managerial Implications of the study: carried out using the sample from M&A deals in the
Although mergers and acquisitions are widely manufacturing sector. Researchers could carry out a
accepted as a vital corporate growth strategy by similar study in other financial sectors. The study takes
companies nowadays, there is, however, a chance that into account EVA; future studies can take into account
a company could achieve success or failure. Recent other measures of value creation like MVA.
trends show that there is a large volume of M&A deals

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of the Manufacturing Sector in India
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Analysis of Economic Value Added in Different Industries 71
of the Manufacturing Sector in India
N. M. Leepsa is Assistant Professor at School of Management, National Institute of Technology Rourkela,
Odisha, India. Prior to this, she worked as Assistant Professor in L. M. Thapar School of Management in
Thapar University, Patiala, Punjab, India. Earlier, she was working as guest faculty in LMT School of
Management, Thapar University, India. Prior to Thapar University, she was visiting faculty at the Rajdhani
College of Engineering and Management, Odisha, India. Leepsa's teaching interests include Corporate
Finance, Cost and Management Accounting, Financial Management, Financial Accounting and Corporate
Restructuring. She has also contributed towards teaching as Teaching Assistant during her PhD Program at
VGSOM, IIT Kharagpur. She can be reached at leepsa.vgsom.iitkgp@gmail.com

Chandra Sekhar Mishra is Associate Professor (Accounting and Finance) at Vinod Gupta School of
Management, IIT Kharagpur, Kharagpur, West Bengal, India. He is working in the field of Financial
Accounting, Reporting and Analysis, Mergers and Acquisitions, Valuation and Financial Markets. He has
published articles on various aspects of Valuation, Performance Analysis, Captial Structure and Corporate
D i v i d e n d Po l i c y. H e c a n b e r e a c h e d a t c s m i s h r a @ v g s o m . i i t kg p . e r n e t . i n o r
chandrasekhar.mishra@gmail.com

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