The Impact of Mengers and Acquisitions on Companies of Telecommunications Market («Mail.ru» and «Megaphone» M&A Case)

In the first chapter of this work, methodologies for determining and assessing the impact of M&A transactions on participating companies were considered. They were to clarify the difference between mergers and acquisitions, the classification of M & A transactions, the identification of the motives for executing these transactions and the determination of methods for assessing the effectiveness of M&A, along with consideration of possible reasons for failures in mergers and acquisitions with their effects on various stakeholders. In the analytical part, only the Russian telecommunications market was considered, which was a limit to the study. Analysis of this market and features of M&A transactions revealed that the first is characterized by a market downturn and a high degree of dependence on the exchange rate of the domestic currency and, accordingly, the prices for the purchase of foreign technologies. The market of mergers and acquisitions in Russia, on the contrary, showed growth trends and increased activity in comparison with similar indicators of the previous year. Next, the Mail.ru Group and Megafon, as participants in the deal, and Yandex as an object of comparison with Mail.ru were investigated, and as a result it was concluded that with a lower cost of capital and higher operating costs, Mail.ru is still inferior to Yandex by level of net profit. Analysis of the quotes of Megafon and Mail.ru Group before and after the transaction showed a positive synergy from the purchase, but with notable features, such as a delay in the week between the announcement of the news of the completed purchase of Mail.ru and the increase in the value of its shares. In addition to the available analysis of firms, an example of state influence on the telecommunications market was considered, namely, the planned introduction in 2018 of the Yarovoy law, which obliges the telecommunications and IT companies to store customer data.