Cost Structure Performance of the select FMCG companies during the Pre and Post Merger Period

Manufacturing firms are involved in acquiring raw materials producing finished goods and then administrative, marketing and selling activities. All these activities require costs to be incurred. In today‟s globalised economy, mergers and acquisitions activity has gained importance caused by intensifying competition liberalization and globalization, integration of national and international markets. The aim of this paper is to study the impact of merger on the cost structure of merging companies by using selected ratios. The sample consists of 21 companies of FMCG industry involved in mergers during the year 2001-11. Percentage of mean growth rate is carried out to assess the performance between pre-merger and post-merger periods. The results of this study suggest that in case of M&A, synergy can be generated in long run with the careful usage of the resources. The success of M&A deals depends on post integration process, timely action and to keep check on the costs of integration process.