M&A effectiveness assessment: empirical study

  • Daria A. Koroleva Financial University under the Government of the Russian Federation
Keywords: mergers, M&A, ESG risks, M&A valuation, DCF valuation

Abstract

Importance: mergers and acquisitions became an efficient strategy for gaining competitive advantages in rapidly changing world. The process of M&A effectiveness assessment is noticeably challenging due to various factors, including non-financial factors, influence on the performance of merged companies. Thus, there is a necessity in development of financial analysis tools and its application to the ESG integration in the M&A effectiveness estimation. Purpose: аrticle is devoted to problems regarding the estimation of the M&A effectiveness taking into account material ESG risks and provide the recommendations for M&A deal effectiveness assessment. Research design: the study critically discusses valuation methods that could be used in assessing the fair value of target and acquirer and identifies the most suitable method for considered industry and companies and provides the M&A deal effectiveness assessment. Results: the paper provides the recommendations regarding the M&A effectiveness estimation process. Performed results in the empirical research highlight the necessity of ESG risks integration in the process of M&A effectiveness assessment.

Downloads

Download data is not yet available.

Author Biography

Daria A. Koroleva , Financial University under the Government of the Russian Federation

graduate student, Assist. Prof.

References

Bloomberg. Carrefour Bid for Casino Would Be a Big Roll of the Dice. [online] Available at: < https://www.bloomberg.com/opinion/articles/2019-0912/a-carrefour-bid-for-casino-would-faceserious-hurdles>.

Bloomberg Terminal (3007.1.80.5) [computer program] Available at ARU.

Damodaran A. Investment Valuation : Tools and Techniques for Determining the Value of Any Asset. [e-book] Hoboken: John Wiley & Sons, Incorporated. Available through: <http://ebookcentral.proquest.com/lib/anglia/detail.action?docID=817867>.

Efimova O.V. A comprehensive approach to the analysis of cash flows under the conditions of high uncertainty.Bulletin of the Voronezh State University. Series: Economics and Management, 2022, no. 3, pp. 5-18.

Efimova O.V., Volkov M.A., Koroleva D.A. The impact of ESG factors on asset returns: Empirical research. Finance: theory and practice, 2021, Т. 25, no. 4, pp. 82-97.

Green J., Hand JRM and Zhang X.F. Errors and questionable judgments in analysts’ DCF models. Review of Accounting Studies [e-journal], 2016, no. 21 (2), pp. 596-632.

Imam S., Chan J. and Shah S.Z.A. Equity valuation models and target price accuracy in Europe: Evidence from equity reports: International Review of Financial Analysis [e-journal], 2013, no. 28, pp. 9-19.

Jensen-Vinstrup M., Rigamonti D. and Wulff J. European cross-border acquisitions: Long-run stock returns and firm characteristics. Journal of Multinational Financial Management [e – journal], 2018, no. 47-48, pp.31-45.

Koroleva D. A. Current global theories, trends and developments in the analysis and valuation of a target company. Modern Economy: problems and solutions, 2021, no. 4, pp. 88-96.

McKinsey&Company. Perspectives on retail and consumer goods. [pdf] Available at: https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/Perspectives%20on%20retail%20and%20 consumer%20goods%20Number%207/Perspectivs-on-Retail-andConsumer-Goods_Issue-7.ashx.

McNichols M.F. and Stubben SR. The effect of target-firm accounting quality on valuation in acquisitions. Review of Accounting Studies [e-journal], 2015, no. 20 (1), pp. 110-140.

Yee K.K. A Bayesian framework for combining valuation estimates. Review of Quantitative Finance and Accounting, [e-journal], 2008, no. 30 (3), pp.339-354.

Published
2023-05-15
How to Cite
Koroleva , D. A. (2023). M&A effectiveness assessment: empirical study. Modern Economics: Problems and Solutions, 3, 112-125. Retrieved from https://journals.vsu.ru/meps/article/view/11242
Section
Accounting, Audit and Economical Statistics