Advances in Consumer Research
Issue:5 : 2776-2783
Research Article
Impact of Mergers and Acquisitions on Financial Performance of India’s Pharmaceutical Manufacturing Firms
Received
Sept. 1, 2025
Revised
Oct. 3, 2025
Accepted
Nov. 19, 2025
Published
Nov. 21, 2025
Abstract

Mergers and acquisitions serve as standard instruments for growth, market position and added value in fast changing industries. The Indian drug manufacturing industry faces heavy rivalry, quick product cycles plus tight regulation - companies therefore merge or buy rivals to widen reach, add products and cut unit costs. The paper measures how such deals alter the acquirer's finances. The work tracks profit margin, return on assets, return on equity, sales growth and cost per unit for three years before but also after each transaction. A sample of acquisitions completed between 2010 and 2020 by listed Indian drug makers supplies the data. The test establishes whether the numbers rise, stay flat or fall once the firms combine plants, R&D staff and distribution channels. Results show that half the acquirers lifted ROA by at least one percentage point and trimmed cost of goods sold by six percent within two fiscal years. The gain came mainly from merged production lines that ran closer to full capacity as well as from pooled procurement of raw materials. Deals that kept both headquarters and duplicate managers posted weaker margins - those that closed surplus plants and transferred orders to the lower cost site posted stronger ones. Managers can use the outcome checklist - capacity use above eighty five percent, procurement savings above five percent besides debt-to-equity below one - before they approve a bid. Investors receive a scorecard that links post-merger ROE change to the acquirer's integration timetable. Regulators gain a sector map that highlights which plant closures reduce supply risk and which create local shortages

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