Financial Due Diligence of M&A Transactions

This paper analyses the algorithm for conducting the procedure of financial due diligence of mergers and acquisitions on the example of the purchase of MTS PJSC of a Russian IT company. The work consists of an introduction, three chapters, conclusion, list of references and applications. The aim of the work is to develop information and methodological support for financial due diligence of M&A operations for MTS PJSC. The methodological basis of this work consists of regulatory legal acts, special literature, domestic and foreign scientific articles dealing with the issue of analyzing the riskiness and effectiveness of mergers and acquisitions. Research, quantitative and econometric methods were used in this work. The first chapter of the work defines the goals, objectives of financial due diligence of M&A operations; the author's analysis algorithm has been developed on the basis of the studied special literature on conducting M&A transactions. In the second chapter, the organizational structure and features of the activities of MTS PJSC are reviewed. Using the example of four Russian IT companies, the proposed algorithm was tested in terms of analyzing the financial risk of a transaction for purchase by MTS PJSC. The third chapter analyzes the regression model of the synergistic effect of mergers and acquisitions of the telecommunications industry in Russia, on the basis of which conclusions were made about the impact of the transaction indicators on the synergistic effect. In addition, the value of the synergy effect from the MTS PJSC transaction was predicted regarding the purchase option for each of the four Russian IT companies. At the end of the work, recommendations were given on the implementation of the transaction on the purchase of one of the four IT companies by PJSC MTS.