ENHANCING PROFITABILITY AND SHAREHOLDER VALUE THROUGH MERGER – A CASE STUDY OF ICICI BANK

Abstract

The study uses one of the high profile mergers of the Indian banking industry to measure the amount of wealth actually created for shareholders by such a merger, using the valuation tools like MVA, EVA, etc. and also the relative profitability measured from variables like Spread and Burden. Attempt has also been made further to find out the relative impact first of variables like EVA, market capitalization, total capital employed, yield, relative profitability, return on net worth, etc. on MVA; secondly of total capital employed, yield, relative profitability, return on net worth, etc. on EVA and finally of variables like EVA, total capital employed, yield, return on net worth, etc. on relative profitability.