An Efficiency of Mergers and Acquisitions across Business Cycles in BRICS Countries

Student: Butina Ksenia

Supervisor: Ilya Partin

Educational Programme: Strategic Corporate Finance (Master)

Year of Graduation: 2017

The present paper is devoted to the examination of the relationships between business cycles and efficiency of M&A transactions in BRICS countries. In order to determine the quality of M&A deals the event study was applied. Three proxy-variables are used to identify stages of business cycles. Real GDP growth rate is used to characterize general trends in macroeconomics; stock market indices and intensity of merger market are applied to describe the trends in financial markets. The analysis of the relationships between efficiency of M&A transactions and chosen determinants allows to understand which indicators the investors are sensitive to. As a result, M&A deals create value during economic expansion in India. The opposite results were obtained for Chinese and Russian companies. The stock market trends affect positively the M&A efficiency in Russia and India. The positive relationships between activity in merger market and M&A efficiency are obtained for Chinese, Russian and Indian companies.

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