M&A Performance in BRICS: Medium Term Aspect

Student: Nekrasov Maksim

Educational Programme: Bachelor

Year of Graduation: 2014

<p>The paper studies the performance of mergers and acquisitions on a sample of 132 transactions in BRICS countries from 2004 to 2011. Based on the accounting study method, it was found that operating performance of companies (EBITDA / Sales) deteriorates as a result of mergers and acquisitions two years after their completion, but this deterioration is not significant. Using the methodology proposed by Healy et al (1992) it was found that the main factors affecting the operating performance are the size of the transaction, the similarity of the industries in which companies operate, as well as the method of payment. Larger transaction size led to greater efficiency. Stock financed deals performed better (+1.5 %) than cash deals  ( -2.1 %). A strong correlation was found between the operating efficiency before and after the transaction.</p>

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