Impact of mergers and acquisitions on companies’ financial performance

Bibliographic Data

ID13023732
AuthorsAlex Borodin (Korkyt Ata Kyzylorda State University), Sayabek Ziyadin (0000-0001-7219-1545, Korkyt Ata Kyzylorda State University, corresponding author), Gulnara Islyam (Korkyt Ata Kyzylorda State University), Galina Panaedova (0000-0001-8261-6308, Korkyt Ata Kyzylorda State University)
Year2020
Volume13
Issue2
Pages34-47
Publication date2020-06-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJOURNAL OF INTERNATIONAL STUDIES (JOURNAL)
Journal identifiersISSN: 2071-8330 • E-ISSN: 2306-3483
PublisherCentre of Sociological Research, NGO (PUBLISHER)
DOI10.14254/2071-8330.2020/13-2/3
OpenAlexW3038605297
LanguageEN
Citations received4
References cited2

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

Business · Financial system · Mergers and acquisitions · Corporate Finance and Governance · Working Capital and Financial Performance · Finance

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