Impact of Mergers and Acquisitions on Indian Pharmaceutical Industry

The study seeks to analyze the impact of mergers and acquisitions (M&A) on stochastic production frontier in Indian pharmaceutical industry during pre and post-merger period. Globalization compelled firms to restructure their operations in various ways and M&A played a significant role for firms in reconfiguration of their production and managerial operations and provided firms an opportunity to avail economies of scale and scope by integrating assets, marketing and production strategies. These major factors resulting in this sudden growth of merger and acquisition deals in India are favorable government policies, capital flow, economic stability, corporate investments, and changing attitude of Indian companies. The Indian pharmaceutical industry has been chosen for the proposed study period, the study a total time span of 24 years covers during pre (1994-95 to 2003-04) and post (2004-05 to 2016-17) merger periods. The study was completely based on secondary data compiled from Ministry of Statistics and Programme Implementation (MOSPI) and PROWESS database. The results suggest that the average production function is an inadequate representation of the Indian pharmaceutical industry