Mergers & Acquisitions in Pharmaceutical Industry, a Challenge in VUCA World

Abstract

After economic reforms era and post globalization, the business for Indian companies has been growing in context of new challenges as well as opportunities in the market. The firms have pressure due to presence of foreign MNCs, changing global business environment, awakened customer and change in political environment. The corporates are enticed to search and widen market for their products, to expand customer base by investing in strategies to allow them to achieve these specific goals.

 Mergers and Acquisitions are the choices opted by the corporates for enhancing growth and to stand out in the competition. M & As help to improve the number of customers, expand area of market and segments, to advance technology and cost reduction. Initially as economic reforms started in 1991 of which globalization leads to integration of economies. It was assumed that as a result of globalization, the foreign companies would ruin the Indian markets by acquiring the Indian Corporates. On the other hand, Collaboration of Indian Companies with Foreign Companies has paved a path to a win-win position for both the entities. Now a days, Indian Companies are moving abroad and acquiring the foreign entities, hereby proving the worth and valuation of Indian Companies abroad.

 The major sectors where M & As are common include: FMCG, Telecommunication, Healthcare, Textile, Finance, Pharmaceuticalsetc. Among all these sectors, Pharmaceuticals is flourishing in Indian market incessantly. The current study is examining the purpose, advantages of Mergers and Acquisitions in Indian market by analyzing the performance of two categories of Corporates. The entities who opted for the option of Merger and those which are non-merged in Pharmaceutical Industry of India. Various measures are applied for studying performance aspect. It proved that the corporates after merger have better performance than pre- merger stage.

 Keywords: Economic Reforms, Globalization, Pharmaceutical Industry, pre-merger, Performance.