Abstract:
The main aim of any company is profitable growth and to maximize the wealth of its shareholders. Further to achieve profitable growth it is necessary for any company to limit competition, to gain economies of scale and thereby increase income with proportionally less investment to achieve diversification, enter new market and utilize underutilized market opportunities. In order to achieve goals, business needs to work towards its long term sustainability. Corporate restructuring is a strategy adopted by the companies to tackle dynamic business environment. This study aims to study the impact of acquisitions on the performance of Indian Pharmaceutical Industry by examining the pre and post financial performance of the companies. Also an attempt has been made to analyze and compare the impact of acquisition announcements on shareholders wealth using Event Study Methodology by calculating Cumulative Abnormal Return (CAR) and Buy and Hold out Abnormal Returns (BHAR). The results reveal that most of the companies did not show the improvement in financial health during the post acquisition period as compare to pre acquisition period. Also the study indicates that most of the companies were not able to generate wealth of their shareholders.
