The Determinants of Financing Mergers and Acquisitions

<p>This study investigates the determinants of M&amp;As financing method and structure in Russia and Brazil. On the basis of credit ratings and available financial data for 2004-2014 and using binary Logit and Probit models the study determines the factors influencing the methods of financing in M&amp;As. Furthermore, this study investigates the influence of credit ratings on the probability of M&amp;A payment by cash. During the investigation regressions were run not only for both countries separately, but distinguishing subgroups in each country by the principle of company&#39;s credit rating existence.&nbsp;</p><p>The significance of results is determined by different combinations of optimal factors for each sample on the basis of two regressions and by choosing the best model for estimating the influence of explanatory variables. The study finds that the significant factor for both samples is RATING. Furthermore, the existence of acquirer&#39;s credit rating appeared to be significant as well, however, its influence on financing method is contrary to expectations. This fact argues on the significance and relevance of research in emerging countries.</p>