Analysis of the Factors, Influencing the Choice of the Financial Sources of Mergers and Acquisitions

This work aims to analyze key factors of the choice of M&A financing. The choice of M&A financial sources has a great effect on the efficiency of the M&A transaction. In addition, the choice of M&A financial funds is one of the most important stages of M&A. In order to determine significant factors of M&A financing, we have studied the advantages and disadvantages of financial funds. Recent evidence suggests that it is necessary to identify external and internal financial sources and also external sources are divided into two types: IPO and debt financing. In this work Russian M&A market also has been examined. In this paper we have analyzed different theories and identified the theoretical hypotheses explaining the choice of M&A financing. The theories, such as the pecking order theory, the theory of agency, the compromise theory, the theory of asymmetric information and the theory of the M&A size, have been analyzed. Using the regression analysis we have examined the main factors and determined the relationship between the repressors. In the research conducted, the sample of 219 Russian mergers and acquisitions has been tested. In this paper we have analyzed only Russian company-buyers. The key source of information used in the work is RUSLANA base, which presents essential M&A characteristics. Moreover, the period between 2012 and 2015 has been chosen. In this research paper, we have tested: financial ratios of company-buyers; factors of the management structure of company-buyers; characteristic of M&A and company-targets and industry characteristic. According to results, many factors have a great impact on the choice of M&A financing, but some hypotheses have not been confirmed. In this research paper we have created the algorithm of M&A financial finds. This work makes an essential contribution to the research development of M&A financing because organizations should analyze M&A factors in order to survive in the current market.