Propagación y pérdidas a través de otros medios

7.1 Findings

In order to examine the performance of a firm prior to a merger and after the merger, therefore, it is necessary to identify which of the merging firms are taken into consideration and analyze their past performance. To do so, we rely on past and present performance. The findings that we have found out of this research are as following

∑ The merger between Dr. Reddy and Beta Pharmaceuticals helped both the companies to improve their prices and returns of the stock moreover it helped Dr. Reddy to diversify its business in other markets and increase their market share.

∑ Dr. Reddy experienced negative returns during the period -10 to -15 days except on the date of announcement, after the announcement of the deal it increased significantly from this we came to know that announcement deals play an important part in determining the market efficiency.

∑ It has been found that the cumulative excess returns of Dr. Reddy and Beta Pharma accumulated for the period (-30 to +30), i.e., from 30 days before the merger to 30 days after the merger is increasing marginally during the 30 days prior to the announcement of merger. After the date of merger announcement through the next 30 days it experienced a positive excess returns, reflecting that the merger announcement information plays a positive role in determining the market efficiency.

∑ Excess returns to the Dr. Reddy and Beta pharmaceutical combined have been found to be positive. There is average cumulative gain to the combined firm in terms of market capitalization as well as book value. The means of both the indicators have been found to be of marginal value. Thus, positive returns have arisen because of the diversification and sentiments of the firms.

∑ Dr. Reddy managers to maximize the utility of Beta Pharma business at the expense of Dr. Reddy’s.

∑ It has been found that on the date of announcement of merger Sun pharmaceutical experienced positive excess returns reflecting that the shareholders expected benefits from the merger.

∑ Taro experienced positive increase in the value of their shares on the date of announcement of the deal. Taro’s CER was increasing during the 4-2 day prior to the merger by 4.7% and rose till 30 days after the merger.

∑ On the announcement date, Taro experienced positive returns. Due to this high positive return it is justified that Taro’s shareholders gain intensively from this merger.

∑ Excess returns for both companies Sun pharmaceutical and Taro have been found to be favorable to the Taro more than Sun pharmaceutical. There is average cumulative loss to the sun pharmaceutical in terms of market capitalization as well as book value

A traditional economic motive for mergers, of course, can be to increase market share and market power to gain competitive advantage. This has not been a major issue in the case of the pharmaceutical mergers in India and elsewhere mergers are subject to scrutiny prior to their implementation by the antitrust authorities.

7.2 Conclusion

This study looked to see how quickly the Market reacts to information, exploring the idea of an investor’s ability to earn an above normal return against the Market. In essence, it possible to outperform the Market when the information about industry is appropriate, with the new information being introduced, like a merger, it would be expected that the Actual Average Return, within the event period, and the Expected Average Returns within the event period would differ. If a significant difference is shown, then the hypothesis that states the information announcement did increase or decrease the stock should be supported. A paired sample was conducted and found that the announcement of the merger may be insignificant in determining its effect on the stock price. A reaction in the Market can be seen in the days leading up to the announcement and shortly after, but the merger announcement play an efficient role in determining the market efficiency. In this research it has been found that merger announcements play an important role in stock prices of the companies announcing the merger and it is evident from this research that stock prices of the companies moved positively when the information about the merger was announces in the market, this helps us to accept the Alternative hypothesis.

The research on mergers between pharmaceutical entities is more encouraging in nature. There is evidence of a positive relation between a firm’s announcing merger and leads to successful outcomes. Indian Pharmaceutical manufacturers are demanding more liberalization, arguing that competition, and not price control, will improve availability and affordability of essential drugs The Indian pharmaceutical industry is on a major growth trajectory and is expected to reach US$

74 billion by 2020. In order to realize the full potential of the market and tap growing global opportunities, companies operating here will have to collaborate in a mutually beneficial manner.

As we move into the next decade, mergers will drive future growth. MNCs will not be averse to acquisitions but high valuations will make M&A’s expensive in India. Alternatives such as alliances and partnerships will actually prove to be more flexible and value enhancing in the long term. MNCs can benefit from the local market knowledge of Indian companies, the strength of their sales force and significant cost advantage across drug development and the manufacturing process. Global pharmaceutical companies have the capability of bringing in newer products, technology, capital and quality leadership. They can help their Indian counterparts in their desire to ascend the innovation curve. However, mergers face significant challenges of quality, valuation, management control, corporate governance as well as cultural issues. Success will depend on thorough due diligence of quality aspects, appropriate valuation and synergy derived from the association. Given the price sensitive nature of the Indian consumer as well as cost pressures from developed economies, pharmaceutical companies will have to focus on improving operational efficiencies. Creating an agile and responsive supply chain that is operationally efficient and minimizing the incidents of supply chain fraud will be of significant importance. At the same time, companies entering cross border transactions should proactively monitor their policies and maintain robust documentation. This will assist companies in optimizing their business operations. Health insurance is a significant driver for the growth of the overall

together to reduce the barriers to innovation and create a vibrant innovation ecosystem to deliver patient-centric solutions. In meeting the challenges of growth, pharmaceutical companies will have to ensure that it is sustainable. Pharmaceutical MNCs as well as large Indian companies are taking an interest in sustainability by implementing initiatives and reporting on their success in the areas of energy and water consumption, emissions and waste treatment and handling, access to medicine by using differential pricing and voluntary licensing. The pharmaceutical industry in India is poised for a period of robust growth driven by mergers. Success in the market will be dependent not only on pharmaceutical companies but also on other stakeholders like healthcare providers, health insurance companies, medical technology companies, government, patient groups as well as society at large acting in concert. How well they do will determine the future of the Indian pharmaceutical industry.

7.3 Suggestions

The suggestions that have been entitled below are for the companies that have entered into merger agreement, by opting these suggestions these companies might get benefited in one or other way and can remain ahead in the market to its competitors.

∑ Pharmaceutical companies that have entered into merger agreement with other companies should establish their production plants where they can achieve Cost effective manufacturing to gain competitive advantage over its competitors.

∑ Pharmaceutical companies should improve their supply chain in order to be grow with the emerging markets and should concentrate more on embedding the culture of one’s organization with the merged organization.

∑ Pharmaceutical companies should improve their global competitiveness by making their presence in foreign markets and should diversify their business in related aspects by Creation and entry to new markets.

∑ Pharmaceutical companies that have entered into merger agreement should increase their product portfolio by adding the products of merged company in their product line.

∑ Pharmaceutical companies that have entered into merger agreement should acquire assets of merged firms, in order to boost their outsourcing capabilities and new products.

∑ Pharmaceutical companies that have entered into merger agreement should consolidate their market shares. Pharmaceutical companies that have entered into merger agreement should adopt the technology of merged firm and should try to maximize its returns from the adopted technology, further more it will help the company to reduce its expenditure on innovating the same technology.

∑ Pharmaceutical companies that have entered into merger agreement should extensive experimental on the manufacturing new drugs.

CHAPTER 8

BIBLIOGRAPHY

8.1

Books:-NAME OF THE BOOK NAME OF THE AUTHOR EDITION

1. Financial Management I.M.Pandey 6th

2. Financial Engineering John F. Marshall 2011

3. Fundamentals of financial management (Authored by vyuptakesh sharan, chapter 16. Page no:230)

8.2 Annual

Reports:-1. Annual reports of Dr. Reddy Laboratories.

2. Annual reports of Beta Pharmaceuticals.

3. Annual reports of Sun Pharmaceuticals.

4. Annual reports of Taro Pharmaceutical Industries Ltd

8.3

Journals:-1. “Note for Guidance on Parametric Release,” CPMP/QWP/3015/99 (EMEA, 7 Westferry Circus, Canary Wharf, London E14 4HB, UK, 2001).

2. H.L. Avallone, Pharm. Eng. 10(4), 38–41 (1990).

3. C. DeSain and C.V. Sutton, Pharm. Technol. 19(10), 131–136 (1995).

4. J. Agalloco, J. Parenter. Sci. Tech. 47(May/June 1993).

5. D.C. Montgomery, Design and Analysis of Experiments (John Wiley & Sons Inc., 6. Hoboken, New Jersey, USA, 1997) pp 315–322.

7. B.T. Loftus in I.R. Berry et al., Eds., Pharmaceutical Process Validation, 2nd Edition

9. E.M. Fry, Pharm. Ind. 46(6), 601–605 (1984).

10. Andrade, G. and Stafford, E. (2004) “Investigating the Economic Role of Mergers.”

Journal of Corporate Finance 10: 1-36.

11. E.M. Fry, Drug Cosm. Ind. 133(7), 46–51 (1985).

12. J.R. Sharp, Pharm. J. 236(1), 43–45 (1986).

13. B.T. Loftus, Pharm. Ind. 42(Nr. 11a), 1202–1205 (1980).

14. Beena, P.L. (2008) “Trends and Perspectives on Corporate Mergers in Contemporary India.” Economic and Political Weekly 43(39): 48-56.

8.4

Websites:-1. http://www.bse.com

2. http://www.moneycontrol.com 3. http://www.investopedia.com 4. http://www. nse.com

5. http://www.allbusiness.com 6. http://www.uri.pdu

7. http://Businessballs.com 8. http://sebi.org