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Mergers and Acquisitions (M&As) in the banking sector have become familiar in a majority of the countries. A large number of international and domestic banks are engaged in M&A activities. With the help of M&As, banks can achieve significant growth in their operations and minimize their expenses to a considerable extent. Another important advantage is that in the process, competition is reduced (Aruna and Nirmala, 2013).
M&As are being used extensively as a tool for growth by firms across the globe. M&As offer inorganic route of growth for firms both within (domestic deals) and across (cross-border deals) the boundaries. The inclination towards mergers in banks worldwide is driven by intensifying competition, need for global size, need to reduce the costs, to take benefit of economies of scale, to expand business into new areas, to improve shareholders’ value and to invest in technology. The heavy competition and survival in the global market has prompted the Indian companies to go for M&As as an important strategic choice. The trends of M&As in India have changed over the years. The last two decades have observed varied movements in the M&A activity in the Indian context with the largest number of deals being observed in 2007 in a span of 11 years between 1999 and 2009 (Kashiramka and Muralidhar Rao, 2013). This period of heightened M&A activity also corresponded with growing Indian economy and well performing financial markets including the Indian stock markets. The fact is that the amount and volume of M&A have touched greater levels, and M&As are important because these activities have significant implications for firm performance (Laamanen and Keil, 2008).
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