Assessing the Impact of Mergers and Acquisitions on Operational Efficiency: A DEA Approach

The present study examined the impact of mergers and acquisitions (M&As) on the operational efficiency of companies within the manufacturing sector, focusing on a period from 2013 to 2023. Employing a quantitative research methodology, the analysis encompasses a decade of financial data for six manufacturing companies, divided into pre-merger (2013-14 to 2017-18) and postmerger (2018-19 to 2022-23) phases. This study employs Data Envelopment Analysis (DEA) to evaluate operational efficiency based on one output variable (revenue) and nine input variables, including operating costs, debt level, capital expenditure, and others. The findings reveal significant variations in efficiency scores, indicating that M&As have a heterogeneous impact on the operational efficiency of companies. Specifically, the study identifies shift s in the efficiency rankings of companies post-M&A, with some firms demonstrating marked improvements in operational performance. The research underscores the utility of DEA as a tool for analysing and enhancing the success of M&As in the manufacturing sector, highlighting the importance of strategic planning and operational efficiency in achieving favourable M&A outcomes.