CHAPTER 1

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1. Introduction

1.1 Mergers and Acquisitions (Global scenario)
Business Combinations are a critical part of the fabric of doing business
in a free market economy and are deeply ingrained in the business
strategy the world over. Such combinations include mergers, acquisitions
and other forms of corporate restructuring undertaken both within a
country and across international boundaries. The intensity of M&A
activity, in US in 1990s was unlike any other year in US history.
Following a drop in both the number of transactions and the total dollar
volume during the 1990 recession, M&A activity rebounded sharply in
1992. Deals during the nineties were prompted more by strategic
considerations and used less debt as compared to 1980s. The financial
environment which was quite favorable in terms of vibrant stock markets
and relatively low interest rates facilitated the resurgence of M&A activity
in US.According to the data furnished by Thomson Financials, the global
M&A activity jumped by 30% in the year 2006 to hit an all time record of
$3.7 trillion surpassing the year 2000 high of $3.4 trillion. The USA
which accounted for over 40% global M&A activity was the most targeted
country for acquisitions. The UK was the most targeted European
country for acquisitions, accounting for cross border and domestic
transactions valued at $339 billion.
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In the meantime according to the data released by Dealogic, a deal
tracking firm, Europe had overtaken the United States of America (USA)
as the most targetd region, accounting for $1.34 trillion or about 40% of
the total deal value compared with the USA share of 36%, or $1.22
trillion. This increase in M&A activity in Europe was caused by
demographics and economic changes which were the major factors
driving M&A activity as an integral part of the overall corporate
restructuring activity in Europe according to experts. The cash surplus
held by private equity firms (PEs) and public companies, the interest
rates which touched their historic lows and the willingness of banks to
provide financing were found to be the key factors for the global surge in
M&A activity in 2006. The year 2007 was again a record year for global
M&A volumes which were estimated at a record figure of around $4.4
billion according to Thomson Financials and $ 4.7 billion according to
Dealogic. Volumes in Europe were higher than in the US for the first time
in five years and only the second time ever: $1.78 trillion vs. $1.57
trillion according to Thomson Financials. This has been partially
attributed to the lag in Europe being affected by the credit markets.
1.2 Global Financial Crisis and global M&A outlook for the
future
The global financial crisis has pushed many countries around the
globe into deep recession and has dramatically affected their business
plans and outlook the world over. The global economy plunged into
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recession in the latter half of the year 2008. This deepened in the early
months of 2009, as global trade contracted sharply, investment was
slashed and consumer demand faded. This nine month period coincided
with the steepest decline in global economy in the post war era. This
period witnessed a combination of severe banking crises in many mature
economies like US, the credit squeeze, massive house price corrections
and dramatic collapse in fixed investments. While the recession may be
easing, as a sequel to the massive fiscal stimulus measures taken by the
governments of the countries concerned and world bodies, the recovery is
going to be slow and patchy. [The Great Thornton International Business
Report (IBR) 2009].
Mike Hughes, global leader-mergers and acquisitions for Grant
Thornton International while attributing the large scale reduction in
transaction volumes to the tight lending policies exuded optimism that
these turbulent times could also provide attractive opportunities to cash
rich/well capitalized businesses to register substantial improvement in
their growth by acquiring ailing but fundamentally sound rivals. The
next 12 months are likely to be a buyers market offering opportunities to
make strategic acquisitions at attractive valuations (Mergers and
acquisitions release, 2009-Thornton). M&A activities gained traction
globally in the fourth quarter of 2009,witnessing a rise in value by 46%
to $739.6 billion which was $150 billion higher than any other quarter
in 2009(Business Standard,20
th
March,2010). This has clearly thrown a
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hint at a resurgence of M&A activity in the Year 2010 according to
Dealogic.
Some key factors for the heightened M&A activity were:
the surplus of cash held by private equity(PE) firms and public
companies
interest rates that touched their historic lows and
the keenness of banks to finance M&A deals.
1.3 M&As in the Indian context
The Indian economy has experienced a major structural
transformation following the introduction of economic reforms by the
Government of India in 1991. The forces of Liberalization, Privatization
and Globalization unleashed by these reforms have brought about a sea
change in the traditional Indian business mindset. Indian business
leaders started thinking in terms of inorganic growth both within and
beyond the borders of the country. In this backdrop, M&A presented a
viable alternative for the businesses aspiring to grow quickly and gain
the benefits of sustainable competitive advantage by realizing the
benefits of scale and scope economies, fast changing technologies for
effectively facing rapidly intensifying domestic and international
competition. Many corporates embarked upon several corporate
restructuring activities like M&As, Joint Ventures, Spin-offs and
Divestitures. The major industry sectors influenced by the forces of
5


consolidation in India, though varied from time to time, were mostly in
the realm of infrastructure sectors like cement, power and steel, drugs,
telecommunications, media & entertainment and banking. A major
change evident after 2002 in the corporate restructuring activity in India
is that of Indian companies making forays into developed foreign markets
through acquisitions and joint ventures (JVs). During this period India
also became an attractive destination for foreign direct investment (FDI)
as the inbound acquisitions also gained considerable momentum. Merger
and Acquisition activity in India comes under the purview of the various
provisions of the Companies Act, Securities Exchange Board of India
(SEBI) and Competition Commission Act of India, 2002.
In the year 2009,M&A and PE investments in India almost halved
both in volume and value terms due to the economic slowdown
precipitated by the global financial crisis. According to Grant Thorntons
Deal Tracker report, the total value of M&A and PE deals announced in
2009 stood at $21.20 billion as against $41.54 billion in 2008. PE and
qualified institutional placement in the same year was at $11.17 billion
($10.59 billion). The M&A and PE investments in 2007 were of the order
of $70.14 billion. There were 488 deals in the year 2009 against over 766
in 2008.Domestic M&A volumes dipped to 142 from 172 in 2008.
Outbound M&A was down at 64(196) while inbound M&A to 61(86).
Coming to the value of deals, the value of inbound deals dipped by about
75% to $ 3.11 billion from $12.55 billion in 2008, the Russian
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Governments acquisition of a strategic stake in Sistema Shyam Telecom
for $676 million was the largest inbound deal in 2009 while Daichis
acquisition of Ranbaxy Technologies for $4.5 billion was the largest
inbound deal in 2008. The value of outbound deals declined to $1.12
billion ($13.19 billion) in 2009. However, the top two outbound deals in
2008-Tata-Jaguar Land Rover and ONGC-Imperial accounted for almost
40% of the outbound deals. Top deals occurred in the oil and gas sector
followed by telecom, pharmaceuticals, healthcare and biotech while in
the year 2008 the top deals were spread across various sectors. It may
also be noted that in 2008, cash-rich Indian companies like Infosys
Technologies made new acquisitions both in India and abroad following a
steep drop in the valuations of target companies.
According to global M&A(Mergers and Acquisitions) intelligence service,
Mergermarket, the overall improvement in economic and business
environment of India has resulted in an impressive (166.5%) jump in the
M&A deals (both inbound and outbound being nearly equal in volume
terms at around $25 billion) in the year 2010 as against 2009.Telecom
sector got the lions share with 16 transactions amounting to $19.6
billion while Bharti's acquisition of Zain Africa for $10.7 billion
contributed signifcantly to the M&A pie in the year 2010.
1.4 Motives for Mergers and Acquisitions
Infrastructure-related industries dominated M&As in 2008
(accounting for over 45% of the deals in value terms). According to
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Bundeep Singh Rangar, Chairman, Indus View Advisors Ltd, Europes
fastest-growing Indian M&A firm advising multinational companies on
business opportunities emanating from Indias rapidly growing economy,
the dominance of this sector in M&As symbolizes the growing need for
world class facilities, adoption of globally acceptable best practices,
experienced global management expertise & technology applications to
accelerate growth in the Indian economy. Grant Thornton (2006)
conducted a survey of Indian corporate managers across various sectors.
Their findings revealed that M&As continued to be a significant form of
business strategy for Indian corporate. The results of the survey are
furnished below:

Table 1.1
Objectives of Indian Corporate For M&As
( In percentage)
Objective behind the M&A Transaction Responses
To improve revenues and profitability 33
Faster growth in scale and quicker time to market 28
Acquisition of new technology or competence 22
To eliminate competition and increase market share 11
Tax shields and investment savings 3
Any other reason 3
Source: Grant Thornton (India), The M&A and Private Equity
Scenario, 2006.



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1.5 Scope of the research study

In recent times, the world economy has developed serious difficulties in
terms of failure of major banks & financial institutions and declining
demand. Future growth prospects became very uncertain exposing major
economies to deep recession. However, in the midst of all this gloom and
chaos engulfing the world economy, Indias banking sector has been
amongst the few to maintain resilience.

A progressively growing balance sheet, faster credit expansion, increasing
profitability and productivity similar to banks in developed markets,
lower incidence of nonperforming assets(NPAs)(around 2% on an average)
and increased emphasis on financial inclusion by the Government of
India and RBI have contributed to making Indian banking sector viable,
vibrant, and strong. In this backdrop, Indian banks have started to
revise their growth strategies and re-evaluate the prospects to keep the
economy rolling. The way forward for the Indian banks is to innovate to
take advantage of the emerging business opportunities besides ensuring
continuous assessment and effective management of risks in the light of
Basel norms on Banking Supervision.
Against this backdrop, Indian banking sector has been selected as the
theme of the research study on Mergers and Acquisitions (M&As) in the
Indian context.
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1.6 M&As in the Indian Banking Sector
During the last two decades, the Indian banking sector has undergone a
metamorphic change following the economic reform process initiated by
the Government of India. The forces of globalization, deregulation and
liberalization unleashed by the economic reforms, set in motion in
1991, have transformed the face of the Indian financial services sector
landscape , including that of the Indian banking sector in a big way.
There has been a paradigm shift from a regulated to a deregulated
environment. Earlier, the banking industry was largely a nationalized
industry (since 1969). The larger developments in the economies across
the globe, the economic crisis in 1991 & more recently the sub-prime
crisis and the changing outlook of the policy makers in India have forced
the pace of change of the Indian banking industry. The economic
liberalization and deregulation measures intiated in the 1990s have
opened up the doors to foreign competition and made the markets more
efficient and competitive. Continuous innovation and keeping pace with
technological change have become a must for survival of the firms in
the financial services industry including the banking sector. The
developments in the Indian banking sector have witnessed quite a few
mergers and acquisitions (M&As).
The banking sector in India has made remarkable progress since
the economic reforms in 1991.The entire financial sector - the banking
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sector in particular is of fundamental importance to a developing
economy. The Narasimham Committee report in August 1991 highlighted
the need for financial sector reforms and fostering competitive spirit in
the Indian banking sector. The report also suggested a roadmap to
achieve this objective. The central theme of the reforms was straight
forward: providing the much needed platform to the Indian banks to
operate from a vantage point on the basis of operational flexibility and
functional autonomy, thereby improving efficiency, productivity and
profitability. The Government did not accept all the recommendations
due to political compulsions and the practical difficulties in
implementation.
In 1997, a second committee was set up (under M. Narasimham) to
specifically suggest further measures for banking sector reforms. The
second Narasimham committee, in its report submitted in April, 1998
had suggested, inter alia mergers among strong banks, both in the public
and private sectors. Since the onset of reforms in 1990, according to the
RBI report, 22 bank amalgamations, have taken place in India (up to
2007). While, the amalgamations of Indian banks were mostly driven by
weak financials as reflected in the continuously deteriorating balance
sheets of the merging entities prior to the year 1999, in the post-1999
period there have been mergers between healthy banks prompted by
business and commercial considerations. The mergers of the largest
commercial bank of India, SBI with State Bank of Saurashtra and State
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Bank of Indore (in progress) are the latest among such mergers. A table
depicting the size and net profits of major public sector banks of India as
at the end of March, 2009 is furnished below.

Table1.2
Size of Public sector Banks in India: March 2009
Name of the Bank
Total Business
(Rs. in crores)
Net Profit (Rs.
in crores)
State Bank of India 642288 9121
Punjab National Bank 364463 3091
Canara Bank 336383 2072
Bank of India 334440 3007
Bank of Baroda 325112 2227
Union Bank 236968 1727
Central Bank 218012 571
Syndicate Bank 198380 913
Indian Overseas Bank 175925 1326
UCO Bank 169880 558
Oriental Bank of Commerce 167434 905
Allahabad bank 144415 769
Indian Bank 124413 1245
Corporation Bank 122496 893
Andhra Bank 103818 656
United Bank of India 90563 185
Vijaya Bank 90410 262
Bank Of Maharashtra 87072 375
Dena Bank 72235 422
Punjab and Sind Bank 59590 437
Source: Statistical Tables Relating to Banks in India: March, 2009, RBI



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1.7 Need for the study
The main motivation for the study is the sustained effort made by the
Government of India and the Reserve Bank of India towards
consolidating the Indian Baking sector, especially in the post-
liberalization period of the Indian economy. In this context, while the
Government of India and the RBI argue that (in the words of Mr.
Chidambaram, former finance minister) consolidation of the banking
sector would result in economies of scale and help the Indian banks
acquire the much needed critical mass to compete effectively in the
global arena, the present level of research does not clearly bring out the
benefits of consolidation, particularly in the banking sector. The study
makes an attempt to examine the effectiveness of this consolidation
exercise of the RBI to enhance the competitiveness of the Indian Banking
industry employing a ratio based approach in the first phase.It also makes
a few suggestions which might enable the policy makers to sharpen their
thinking in the area and help them in adopting a more rigorous and
critical approach to bank consolidation, which is necessarily a time-
consuming and complex process.
The vital importance of an efficient banking system in the long term
growth strategy of a fast developing economy like India can hardly be
overemphasized. Research studies of this nature are crucial for the policy
makers, business and industry leaders and even the ever growing
investing public who are keen to know the strengths and weaknesses of
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the banking system of the country. The analysis of bank efficiency is
significant from both the microeconomic and macroeconomic
perspectives (Berger and Humphrey, 1997).The issue is crucial from
microeconomic perspective because of the emerging competitive business
scenario and the steps taken by the government and the Reserve Bank of
India (RBI) to liberalize the banking system. From the macroeconomic
perspective the issue gains crucial importance in the context of the
overarching influence that efficiency exercises on the cost structure of
the banking system and the overall growth, vibrancy and stability of the
financial markets.
The motivation for the study stems from the crucial role of M&As in
shaping the restructuring process of the Indian banking sector in future.
Quite a few studies conducted to evaluate the impact of bank mergers
have adopted either accounting based or market based approaches, with
each one having its own strengths and shortcomings. The results of
event studies seem to depend substantially on technical details such as
the length of the event window selected. Further meaningful price data
exist only for those banks whose shares are actively,publicly traded
(Amihud et al, 1998). The bottom line of accounting studies is that there
is no clear relation, on average, between acquisitions and subsequent
accounting performance. One plausible explanation is that the
accounting data are too noisy to isolate the effects of acquisition. This is
because of the transformation the accounts of the merging entities
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undergo during the merger (like restatements, special amortization and
depreciation, merger related costs etc) (Kaplan, 2006). While the period of
study in many research studies conducted to evaluate banking
efficiency, especially in the context of bank mergers is relatively short,
the present study covers a fairly long period over which a sizeable
number of bank mergers (in India ) have taken place. The present
study therefore addresses a critical gap in the literature by providing
recent evidence on the bank merger efficiency in the Indian context.
Secondly, in order to evaluate the effectiveness of the commercial bank
mergers in India, it is necessary to undertake a formal analysis. This
study thus makes an attempt to provide empirical evidence on the
efficiency changes of select Indian commercial banks over a period from
1995 to 2009 using the non-parametric Data Envelopment Analysis
(DEA) methodology, as the second phase of this research effort.
Employing this methodology, the overall, pure technical and scale
efficiencies & cost and profit efficiencies of the twenty seven sample
banks (both public and private sector) have been measured. The impact
of mergers on efficiency changes has been investigated by comparing
average relative efficiency scores three years before and three years after
the merger. Further, the study employs the Tobit regression technique,
which is a generally accepted methodology in the literature, to identify
the determinants of efficiency of the Indian commercial banks. This
technique also captures the long term trends. Tobit regression technique
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to identify the determinants of efficiency of the commercial banking
sector in India for a panel data covering a fairly long period has been
scarcely employed in the Indian context.
The Indian banking sector has undergone massive upheaval in terms of
the sophistication and innovation in the product and service mix,
technological up gradation, customer reach and sectoral coverage fully
exploiting the opportunities which help increasing revenues while
optimizing on costs. At the same time, the expectations of the consumers
of banking services have increased many fold. The entry of private and
foreign banks has changed the competitive landscape and ushered in an
era of intense competition. As a result, the customer has become the
focal point in the decision making process of a bank and factoring his
views/expectations in designing or developing various banking products
or services is a must for achieving sustainable competitive advantage.

Businesses feel the need to merge when they exhaust possibilities of
organic growth, or when they want to achieve increased market share in
good time. In the era of globalization, banks will have to be financially
strong and competitive to face the challenges and leverage the
opportunities. Many well publicized mergers have transformed regional
banks into national banking power houses. (Urban et al,2000).
The Indian banking sector has embarked upon consolidation &
restructuring that is expected to continue. Shri Purwar, the then
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Chairman of State Bank of India, in a round table conference arranged
by Business Standard said : Seven to ten years down the line, there
could be six to seven public sector banks and a couple of private sector
banks and certainly some foreign banks. According to Mr.
Chidambaram, former finance minister of the Government of India, the
three Cs, i.e. Competition, Convergence and Consolidation will be the key
drivers of banking sector in the future. Addressing the bankers
conference, R. Gopalan, Secretary, Financial Services, GOI said merger
should take place at banks own initiative based on pure business sense.
In mergers and acquisitions, banks should look at synergistic gains,
technology, scale economies and operational benefits (Business Line,
13th January, 2010). In this complex and gigantic effort of bank
consolidation, where does the customer stand? What are his views and
expectations? Does he stand to gain or lose? How does he perceive the
whole exercise? Does he feel that his voice is being heard or he feels let
down and helpless. These questions, though seemingly simple, are the
most difficult ones to answer.
Service Quality Level and Customer Perception
Many consumers are concerned that the level of service quality has been
declining over the last two decades. From the customer service
perspective, a decline in service quality can be attributed to the rise in
two-income households, and the busier lifestyles of the cosumers of such
services. Having higher incomes, better education, and less time has
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made consumers more demanding with regard to convenience and
service quality. Just as in the United States, the service sector is a
critical component of the economy of other countries, like India. (Clow et
al, 2008).Over the last decade and a half, lot of research has been
undertaken to evaluate the various dimensions of service quality, which
is being increasingly viewed as one of the key strategic values of service
sector organizations.(Lewis,1991). It is important to explain the word
perception in some detail. Perception is the act of discerning, realizing,
and becoming aware of through the senses. The customers perception
is what matters, not what we think it is (Tom Albrecht President aQsi,
October 10, 2003).To customers who are evaluating the quality of a
service, it is their perception that counts, not what the service provider
thinks. Service firms must understand the concept of service quality
from the viewpoint of the customer, not from the viewpoint of the service
firm or service provider. (Clow et al, 2008).
Importance of Customer Service Quality in Banks
State Bank of India, the largest commercial bank of the country, has over
150 million customers. In the words of O. P.Bhat, the Chairman of the
bank, One can not serve without a cause, nor become better without
one. And our cause has been the customer. We have been addressing
customer service in a million different ways. While responding to a query
from the media why the SBI has, of late, become aggressive, the
Chairman has replied: We have not become more aggressive, but more
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focused, agile, customer-centric. We have come closer to our
constituents. We anticipate their needs, we respond to them to the best
of our abilities, using technology. We have centralized every thing that
could be centralized and made the branches available for sales and
service.
The above statements are a clear reflection of the thinking of top
management of the banks about the importance the customer has in
their scheme of things. Banknet India, a banking research companys
Financial Sector Survey 2007 identified that Customer Service, Security,
Know Your Customer(KYC) were regarded as the top priority issues to be
addressed by the financial sector in 2007. The impact of bank mergers
on various stake holders including the communities involved and on
customers is significant and it is therefore important to study their
effects.

A plethora of information is available about the financial and human
resource implications of mergers in general and bank mergers in
particular from various sources. Many studies talk about the scale and
scope economies, diversification benefits, and growth in market share,
impact on valuation and other financial performance parameter
improvements. A good number of studies have also investigated into the
HR and cultural conflict related issues in the context of bank mergers.
However, there is very little quantitative information available about the
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impact of these mergers on consumers of banking services and on their
perceptions of banking services in India. The present study therefore
examines, in its third and final phase, the impact of commercial bank
mergers in India on the service quality perceptions of bank customers. It
also attempts to identify the factors which the customers consider critical
in this regard.
1.8 Objectives of the Study
The present study has the following objectives:
1.8.1 Ratio Analysis approach for evaluating the post-merger
performance of select commercial bank mergers:
To evaluate the financial performance of the commercial banks before
and after merger, during the period 1994-2009 (post-reform period)
To summarize the findings and offer appropriate recommendations for
the future banking merger policy of the Government of India/Reserve
Bank of India.

1.8.2 Data Envelopment Analysis (DEA) approach to evaluate the
post-merger performance of select commercial banks in India
To understand the role of Data Envelopment Analysis (DEA) in evaluating
the relative efficiencies (Technical, Scale, Cost and Profit) of Decision
Making Units (DMUs) in a given sample.
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To investigate the empirical evidence on the efficiency/productivity gains
of the Indian commercial banks during the post-reform (deregulated)
period.
To examine the role of commercial bank mergers in efficiency gains, if
any, in the post-reform period.
To identify the factors which critically influence the efficiency and
productivity of commercial banks in India.
To suggest measures to the policy makers (Government of India and the
RBI) for effective implementation of merger policy of commercial banks in
India.
1.8.3 Marketing implications of commercial bank mergers /
Customer perceptions of service quality in the face of commercial
bank mergers in India.
To understand the marketing implications of commercial bank mergers
in general and in the Indian context.
To identify the key factors influencing the service quality perception of
customers in the face of commercial bank mergers in India.
To explore whether different demographic/behavioral groups have
unique service needs and deserve distinct promotional appeals in the
marketing strategy formulation of commercial banks in the face of
mergers.
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To suggest measures aimed at improving the service quality of the
commercial banks in India in the face of mergers.
1.9 Hypotheses of the Study

1.9.1 The following hypotheses have been set up for testing for statistical
significance of each financial ratio separately (Ratio approach).
H0: There is no significant change in the financial ratio due to the M&A
event.
H1: There is significant change in the financial ratio due to the M&A
event.
1.9.2 Keeping the objectives in perspective, and having regard to the
results of past research in the area of measuring post-merger efficiencies
(DEA approach) in the global and Indian banking sectors which were at
best mixed, the following four hypotheses have been framed to seek
empirical evidence on the impact of mergers on the efficiency of Indian
banking sector in the post-reform period.

Hypothesis: 1 (Technical Efficiency)
H0: Technical efficiency of acquiring bank will not improve in the post-
merger scenario.
H1: Technical efficiency of acquiring bank will improve in the post-merger
scenario.
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Hypothesis: 2 (Scale Efficiency)
H0: Scale efficiency of acquiring bank will not improve in the post-
merger scenario.
H1: Scale efficiency of acquiring bank will improve in the post-merger
scenario.
Hypothesis: 3 (Cost or X- Efficiency)
H0: Cost or X- Efficiency of acquiring bank will not improve in the post-
merger scenario.
H1: Cost or X- Efficiency of acquiring bank will improve in the post-
merger scenario.
Hypothesis: 4 (Profit Efficiency)
H0: Profit Efficiency of acquiring bank will not improve in the post-
merger scenario.
H1: Profit Efficiency of acquiring bank will improve in the post-merger
scenario.
1.9.3 To evaluate the marketing implications of commercial bank
mergers in India, having regard to the review of literature in this regard,
the following hypotheses are proposed:
Ho: There is no significant association between respondents
demographic/behavioral characteristics and perception of the effect of
commercial bank mergers and acquisitions on banking services.
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H1: There is significant association between respondents
demographic/behavioral characteristics and perception of the effect of
commercial bank mergers and acquisitions on banking services.

1.10 Limitations:

Non-availability of data for certain parameters for the period under
study.
Efficiency calculations (under DEA) cannot be performed in case of
inputs or outputs with negative values.
The present studys (marketing implications) sample of customers
is drawn from Hyderabad city only. To get better insights, a
broader sample comprising other regions/cities of the country may
be taken.
1.11 Fruitful avenues for future research:

The future banking M&A will be cross-border with substantial
potential synergies but can create large systemic risk and hence
future research should explore these perspectives more fully before
we can draw conclusions there from as to the effectiveness of
mergers and acquisitions.
Future research may also look at the cross-industry M&As within
the financial services sector in India and abroad as this an area
which has not been investigated much.
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In future research should lay more emphasis on dynamic analysis
methods rather than static ones, which do not use data on M&As
directly but instead relate the potential consequences of
consolidation, like the market power, service availability etc.
DEA analysis may be attempted using slacks based models.
Market efficiency measures may also be employed to evaluate the
efficiency effects of mergers.
If the sample size is large, parametric techniques like the
stochastic frontier analysis (SFA) can be employed.
BASEL-III norms which require more stringent risk management
standards to be put in place by commercial banks call for more
rigorous research into the M&A implications in the banking sector
in the light of these requirements.