Least Successful M&A Deals on Emerging Markets: Main Causes of Failure

In recent years, the number of M&A deals has increased significantly. However, approximately half of them have not been successful. Also, most of the empirical research is devoted to developed markets, while the emerging markets have not been studied as thoroughly. In this study we formed the sample from 130 M&A deals conducted on emerging capital markets and analyzed the factors that can lead to inefficiency of the deal. In order to evaluate the effectiveness we used short-term event study. 8 hypotheses were tested in this paper. The empirical analysis showed that 7 of them can be confirmed with different models and various event windows. As a result of this research we determined that the absence of the experience or presence too much experience, various industry affiliation and relative company size have the most negative impact on M&A deals. Moreover, one of the main conclusion of this study is the fact that different factors influence the efficiency and inefficiency of M&A deals. Therefore, managers during M&A deals need to pay attention to a combination of factors, where some of them will help to avoid failure, while others will lead to abnormal return.