Impact of Mergers and Acquisitions on Companies' Financial Performance

• Autorzy: Alex Borodin , Sayabek Ziyadin , Gulnara Islyam , Galina Panaedova
• Języki publikacji: EN

Abstrakty

EN

This paper explores the influence of M&A transactions on the financial performance of US and European companies. We have studied the sample of 138 M&A transactions performed within these two regions during the period between 2014 and 2018. We investigate the correlation between return on sales (ROS) and such variables as equity-to-enterprise value ratio. Moreover, we observe the impact of the financial crisis and industry-relatedness to M&A parties on the performance of a merged company. Most of the corporations studied both in the USA and in Europe were profitable, and remained so after mergers and acquisitions. However, despite the fact that positive values were found for the studied variables, tests for the analysis of average values in the sample show a significant deterioration in ROS in both regions. At the same time, in the USA the change in the EBIT/Total Revenue ratio averaged -6.8 %, and in the European countries -5.3 %. Regression analysis did not reveal a significant relationship between mergers and acquisitions and company performance indicators, and the difference in values by region can be interpreted by the fact that the US entered the crisis at an earlier point in time. The significance and the sign of the EVEQ coefficient indicate that, ceteris paribus, an increase in the "attractiveness" of target companies leads to an increase in ROS. The results do not indicate any particular impact of M&A on post-M&A performance in the companies considered. (original abstract)

Słowa kluczowe

EN

Corporate finance; Mergers and acquisitions; Rate of return

PL

Finanse korporacji; Fuzje i przejęcia; Stopa zwrotu

• Czasopismo: Journal of International Studies
• Rocznik: 2020
• Tom: 13
• Numer: nr 2
• Strony: 34--47

Twórcy

autor

Alex Borodin

• Plekhanov Russian University of Economics, Russia

autor

Sayabek Ziyadin

• Korkyt ata Kyzylorda State University, Kazakhstan

autor

Gulnara Islyam

• Serikbayev East-Kazakhstan State University Oskemen, Kazakhstan

autor

Galina Panaedova

• North-Caucasus Federal University, Russia

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Identyfikatory

DOI

10.14254/2071-8330.2020/13-2/3