A Case Study of Acquisition of Spice Communications by Idea Cellular Limited

Mergers and acquisitions (M&A) are increasingly being adopted by organizations today to maintain a competitive advantage in the market. The assessment of shareholders' wealth effects is one of the most researched areas in the field of finance. This paper is aimed at studying the impact of mergers on the operating performance of the merged entity by examining pre-merger and post-merger ratios. It also studies the behavior of share prices and returns 20 days before and after the announcement of the acquisition deal of Idea Cellular and Spice Communications. The study highlights that shareholders do not get value addition to their wealth around the announcement date