Involuntary mergers and their impact on the financial performance of a merged entity have received little attention in the academic world. To examine the phenomenon, we utilize a unique setting whereby a regulatory change influences merger activities in Nepal. We hand-collect financial data from each company's website and conduct a mean difference test between the financial ratios three-year before and after the involuntary merger. We find that financial institutions grow in size after the merger, but these involuntary mergers do not improve the financial performance of the companies involved. Thus, we recommend that institutions conduct due diligence before approaching a merger partner.
Mergers and acquisitions, commercial banks, financial performance, synergy, regulation, Involuntary
Kabi Raj Acharya and, Naveen Kumar Sharma. The Effect of Mergers and Acquisitions on the Financial Performance of Nepalese Commercial Banks. Indian Journal of Modern Research and Reviews. 2024; 2(2):38-47
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