Cash Reserves as a Catalyst for M&A Activity: An Empirical Analysis of Engagement and Success Rates Among Indian Companies.
G.P Tejishree
, Dr.SRIKANTH P
Cash Reserves, Mergers and Acquisitions (M&A), Corporate Governance, Value Creation, Emerging Markets, India.
Focussing on Indian companies, this study investigates the role of cash reserves as a catalyst
for mergers and acquisitions (M&A) activity. It finds that firms with large cash reserves are
more likely to engage in M&A because of lower transaction costs and financing constraints.
Although results differ greatly, value creation is ensured in large part by sector-specific
dynamics and sound corporate governance. Cash reserves increased flexibility and bargaining
power, especially in international transactions, but they also carry the risk of destroying value
if overpayment results from managerial arrogance or poor governance. Sectoral analysis
reveals that while capital-intensive industries struggle with operational synergies, technology
and pharmaceutical companies experience greater post-merger profitability and innovation.
The study emphasises how cash reserves play a dual role in M&A, promoting strategic growth
while presenting inefficiency risks—and emphasises how crucial sound governance,
behavioural aspects, and macroeconomic circumstances are in determining acquisition tactics.
These observations aid in the comprehension of cash-financed M&A in developing nations
such as India, where institutional and economic circumstances impact choices.
"Cash Reserves as a Catalyst for M&A Activity: An Empirical Analysis of Engagement and Success Rates Among Indian Companies.", IJSDR - International Journal of Scientific Development and Research (www.IJSDR.org), ISSN:2455-2631, Vol.10, Issue 6, page no.b185-b200, June-2025, Available :https://ijsdr.org/papers/IJSDR2506120.pdf
Volume 10
Issue 6,
June-2025
Pages : b185-b200
Paper Reg. ID: IJSDR_303589
Published Paper Id: IJSDR2506120
Downloads: 000498
Research Area: Others area
Country: Bengaluru, Karnataka, India
DOI: https://doi.org/10.56975/ijsdr.v10i6.303589
ISSN: 2455-2631 | IMPACT FACTOR: 9.15 Calculated By Google Scholar | ESTD YEAR: 2016
An International Scholarly Open Access Journal, Peer-Reviewed, Refereed Journal Impact Factor 9.15 Calculate by Google Scholar and Semantic Scholar | AI-Powered Research Tool, Multidisciplinary, Monthly, Multilanguage Journal Indexing in All Major Database & Metadata, Citation Generator
Publisher: IJSDR(IJ Publication) Janvi Wave
