In today's globalized economy, Mergers and Acquisitions (M&A) are being increasingly used the world over for improving the competitiveness of companies through gaining greater market share, broadening the portfolio to reduce business risk for entering new markets and geographies, capitalizing on economies of scale, etc. This research is aimed at studying the impact of mergers on the operating performance of the acquiring firm by examining pre-merger and post-merger financial ratios. It also examines the behavior of share prices 20 days before and after the merger of Tata Steel with Corus Steel. Researches on share price performance so far suggest that the acquiring firm generally earns positive returns prior to the announcement day, but less than market portfolio in the post-merger period. The result of this study fails to support our hypothesis that merger gains are captured at the beginning of a merger program. It is found that stockholders suffer loss for different window periods around the announcement period. The study begins with theories of M&A, a brief history of the sample units, the significance of the study, the study objectives, and the methodology followed. Next, it analyzes pre-merger and post-merger operating performance, and discusses the literature on share price, the models used for the analysis, and the results on share prices. Finally, it tests our hypothesis by using paired T-test, before drawing conclusions.

In today's globalized economy, it is becoming evident that the current ways of doing business are not good enough. In order to stay competitive in tomorrow's market, organizations have to invent new ways of competing. In a world of continuous redefinition of industry boundaries and commingling of technologies, businesses have to strive for `opportunity share' in future markets. It is sufficient to say that what is needed today is strategic clarity based on established principles. Strategic decisions such as divestments, new product launches, acquisitions, consolidations, etc., though in vogue for long, have become more relevant today than in the past, for creating additional space for the existing firms to claim additional margins in `opportunity share'. Mergers and Acquisitions (M&A) have thus become universal tools to attain greater market share, acquire additional brands, cannibalize competing brands, realize improved infrastructure, create new synergies, capitalize on efficiencies and economies of scale, globalize in shorter spans of time, etc.

Against this world scenario, it is heartening to listen to the Indian Finance Minister saying that "consolidation is the name of the game. If two or more companies come together, we will support them and we need world class companies. We have to think global and act local." His comments are just in consonance with what the theoreticians in finance have been often saying: M&A are the best fit strategies for quick growth and, in turn, for maximization of shareholders' wealth. Secondly, the announcement is pretty timely—with the opening of the manufacturing sector to global competition under World Trade Organization (WTO) agreements, it is essential to accomplish economies of scale in the manufacturing industry to compete with the global players.

Accounting Research and Audit Practices, Global Economy, Mergers and Acquisitions, M&A, World Trade Organization, WTO, Corporate Performance, Conglomerate Mergers, Human Resources, HR, Monopolies and Restrictive Trade Practices, MRTP, Economic Value Added, EVA, Global Economic Growth.