Value Creation in Indian Public Sector Bank Mergers: A Case Study of Union Bank of India

Abstract

This study explores the concept of value enhancement through mergers and acquisitions (M&A), with a focused analysis of Bank of
Baroda’s strategic amalgamation. In response to intensifying competition within the Indian banking sector, M&A has emerged as a
pivotal strategy to enhance operational performance, broaden market reach, and strengthen geographic presence. The research centres on
the historic 2020 merger of Union Bank of India with Andhra Bank and Corporation Bank—an event that marked a transformative phase
in India’s public sector banking landscape. By examining financial performance indicators such as profitability, asset quality, and non
performing assets (NPAs), this study assesses the merger's overall impact. A comparative analysis of pre- and post-merger data indicates
that despite initial hurdles related to integration and asset health, Bank of Baroda was able to harness operational synergies, eliminate
functional redundancies, and expand its customer base. These factors collectively led to notable improvements in financial stability. In
addition, the research delves into the complexities of organizational integration and risk management, offering valuable insights into how
M&A strategies can effectively foster value creation within the Indian banking industry.