Retrieval Number: B1651078219/19©BEIESP DOI: 10.35940/ijrte.B1651.078219 International Journal of Recent Technology and Engineering (IJRTE) ISSN: 2277-3878, Volume-8 Issue-2, July 2019 3256 Published By: Blue Eyes Intelligence Engineering & Sciences Publication Developing Synergies in the Pharmaceutical Sector: M&A Activity post 2005 Santosh Gopalkrishnan, Parth Aggarwal, Nehachandra Balabhadra Abstract: Mergers and acquisitions (M&A) are inorganic growth strategies which have their importance in the present corporate world because of the prevailing stringent business conditions. In the current globalised economy, M&As are progressively utilised for enhancing the intensity of pharmaceutical firms through the rise of their market share in the industry, widening of product portfolio to enter new markets and geographies (competitive advantage) and reaping benefits through enhanced economies of scale. A strong and developing domestic market, a substantial pipeline of generic medicines and a capacity to service established markets abroad have swiftly made the Indian pharmaceutical companies most sought-after in the M&A space. This paper analyses the performance of M&A activities in the pharmaceutical space in India. It aims to consider the pattern in M&A across pharmaceutical companies in India, especially during the period 2005–2017 through a pre- merger and post-merger analysis. The paper performs a pre and post-merger comparison of 4 most crucial M&A deals in the Indian pharmaceutical landscape through metrics like ratio analysis, share price performance (accretion or dilution in case of listed companies) and synergy benefits from the point of view of the target as well as the acquirer and the combined entity as a whole. Index Terms: Indian Pharma Sector M&A, M&A in Pharma, Synergies in the Pharma Sector I. INTRODUCTION In the present scenario, organisations across the globe, in order to proliferate and create enhanced value for their stakeholders are entering into strategic alliances with companies within the same sector in the same geography or different sector with an altogether different geographical presence. This route via M&A deals is perceived as a viable strategy to reduce cost, increase efficiency, create a global footprint, ensure economies of scale in operations with easy access to advanced and sophisticated technology and thus create value for the owners and shareholders of the business. There has been significant growth in mergers and acquisitions in the Indian space as well, and this growth can be divided into the following three stages: Revised Manuscript Received on July 09, 2019. Dr. Santosh Gopalkrishnan, Symbiosis Institute of Business Management, Symbiosis International (Deemed) University, Pune, India. Parth Aggarwal,Credit Manager – Mid Corporates, ICICI Bank. NehachandraBalabhadra,Asst. Relationship Manager, ICICI Bank. Figure 1: Growth in Indian M&As since 1990s II. REVIEW OF LITERATURE Mergers and Acquisitions (M&A) have always been a subject of great importance and interest in the financial landscape. In the past, many research studies have been carried out to analyze the impact of such a consolidation on the bidder and target and evaluate the potential gains in the form of synergies or losses arising as a result of such a transaction. However, before, we look into the intricacies and details of the M&A deals which we are analyzing as a part of this research paper, lets first understand from the perspective of eminent authors the meaning of a merger and an acquisition, their types, motives behind undertaking such transactions and reasons for their success and failures. According to Professor Alexander Roberts, Dr. William Wallace and Dr. Peters Moles (2016) a merger or an acquisition has been defined as the combination of two or more companies into one new company or a corporation. The main point of difference between the two is the style in which the transaction between the bidder and the target are undertaken. A merger refers to a combination of two companies after a process of negotiation, listing out the potential benefits (commonly known as synergies), the difficulties as well as the challenges that will arise for both the entities as a new entity is formed. All this takes place through a series of meetings between the management of both the target and the acquirer, and if the terms of the contract are agreed upon by both the parties, then the deal is closed. The mergers can be vertical, horizontal or conglomerate by the nature of its type. Conversely, an acquisition indicates a buyout of one firm (target) by another firm (acquirer) in such a manner that the target firm either becomes a wholly owned subsidiary of the acquirer and may eventually be merged within the business of the acquirer firm and cease to exist in the long run or continue as one of First Wave (1990-95) - Indian Corporates face foreign competion Second Wave (1995-2000) - Influx of Multinationals in Indian market Third Wave (2000-till date) - Domestic companiess venturing abroad (cross border)