Pre and Post Merger Valuation- A Study of Tata Corus Merger Deal

Abstract

Indian Economy being characterized as Global Economy leading to inorganic growth through Mergers, Acquisitions, Takeovers and Joint Ventures. Mergers would affect the company’s inflow and outflow of various variables like sales, expenses and cash position etc. It becomes imperative to evaluate the pre merger and post merger conditions of the firms so that successful deal can be carried out. The deal would also affect the shareholders wealth. The prediction of future forecasted sales and other variables, gains and losses from the deal are the key areas or principal governing factors to be taken care of. This research paper is an attempt to analyze the valuation of the merger deal under consideration (Tata Corus) and the pre as well as post merger situation of two companies. In this paper, the valuation of the deal is being carried out using Merger Valuation Model i.e. Discounted Cash Flow and Data mining tools like SPSS to establish a suitable trend line and justifying the deal. The Forecasting is being done till 2011.