130 © 2021 Conscientia Beam. All Rights Reserved. ANALYSIS OF SYNERGIES IN INDIAN CORPORATE M&A DEALS: A LOGIT REGRESSION APPROACH Anjala Kalsie 1 Neha Singh 2+ 1 Associate Professor, Faculty of Management Studies University of Delhi, Delhi, India. 2 Research Scholar Faculty of Management Studies University of Delhi, Delhi, India. (+ Corresponding author) ABSTRACT Article History Received: 5 February 2021 Revised: 10 March 2021 Accepted: 2 April 2021 Published: 26 April 2021 Keywords M&A activity Synergies Indian corporates Logit regression analysis Cash deals Industry relatedness. JEL Classification: G34; C35; M4. A firm's financial attributes play an essential part in the merger decision. The present paper attempts to improve the existing literature on assessing M&A activity in Indian corporate. The primary objective is to analyse 1) When synergies are gained, payment is made in cash, 2) When synergies are gained, M&A activity takes place in the related industries. The paper has analysed 20 major M&A deals which took place between 2010 and 2015 for the Indian Corporates. The data includes three year pre-merger , year of merger and three year post merger i.e. a total of seven year data for each deal has been used in the study effectively from 2007 to 2018. Random Effect Logit Regression has been applied to estimate the relationship. The major results derived from the analysis suggest that EBITDA has statistically significant relation with payment dummy as well as Industry relatedness. Statistically significant results have also been observed for Free Cash flow. Asset Turnover has also shown to have a significant relationship with relatedness of industry in our model. The results supports both the hypothesis of the study i.e. “When synergies are gained, cash mode of payment is preferred. ” and “When synergies are gained, mergers & acquisition in related industry sector are preferred”. Contribution/Originality: This study is one of the very few studies which have investigated how the mode of payment in Merger and Acquisition(M&A) strategy is impacted by the synergies gained in the major M&A deals for Indian Corporates over the period from 2010 to 2015. 1. INTRODUCTION The most common means of corporate restructuring in the present era is merger & acquisitions (M&As). M&As have played a significant role in the external growth of the world's leading corporations. The idea of merger, which started in 1890 in the United States, has now become very common in today 's globally competitive global business environment. When two or more companies combine into one entity, mergers are said to occur (Bose, 2014). Acquisition is characterised as an act of directly acquiring right to possession or management of a company by another company with little or no combination of business or organisation. The opening of economy post the 1990s have surged an era of M&A deals in India , though they were not uncommon before, but with a lower frequency (Bhoi, 2000). The government's liberal economic policy after the 1990s allowed enterprises to undergo technological growth, diversification and upgradation. A number of businesses have found it necessary to combine with comparable business units and subsidiaries in order to achieve cost savings and improved productivity. As shown in Figure 1, the quantum of deals in India has seen a steady rise since 2013, with a reciprocal increase in the total quantity of deals undertaken. In 2015, businesses reported more The Economics and Finance Letters 2021 Vol. 8, No. 2, pp. 130-141. ISSN(e): 2312-430X ISSN(p): 2312-6310 DOI: 10.18488/journal.29.2021.82.130.141 © 2021 Conscientia Beam. All Rights Reserved.