Mergers and acquisitions in the IT sector

Abstract

In this report we have studied the aspects of mergers and acquisitions in the IT sector. We wanted to understand nuances of Mergers and Acquisitions in the IT domain. We started by understanding reasons that a company employs to go for mergers and acquisitions. We read books on mergers and studied the on key resources available online to enlist the key reason for the same. With this criterion in mind we did an evaluation for the Tata – Jaguar merger. But there are numerous differences with respect to it in the IT domain. We researched on the same ad came up with a list of reasons which were attributed to mergers in IT domain. There were a lot of strategic reasons that became fairly relevant here. We also analyzed the IT industry and the evolution of the same in over the period. The focus was looking at the growth of the same, with specific focus on the Indian industry because we have focused on the analysis of Indian deals in the later sections. The study clearly showed that there was a gradual shift to higher level of sophistication in the projects that were coming to India and the mergers also reflected the same. We also observed the global trends that existed over the period and have presented the same in our report. The next part of our analysis involved a study involved analysis of the data. We reviews literature and found that Event study analysis was often used as the preferred means of analyzing the market perceptions of a merger. We used capitaline.com as the source for our data and did 2 part analysis, looking at 3 mergers where both companies were listed and 3 companies which acquired / got acquired by unlisted companies. Lastly, we have studied through valuation models, the effectiveness of 2 mergers and did the comparison of key ratios to the impacts overall.