Performance of Mergers and Acquisitions of Innovative Companies

The study is devoted to evaluating the performance of M&A in which the buyers are companies operating in innovative industries in developing countries. The main focus of the research is to investigate the factors that influence the synergy effect implementation, which means an increase in financial performance indicators of the buyer due to a competent asset integration process. The accounting study approach with RoA, RoE, EBITDA Margin coefficients is used. Using the sample of 226 M&A from the beginning of 2011 to the end of 2018 it was found that the average deal leads to a decrease in performance indicators of the buyer. It was also revealed that intra-country transactions are more effective than cross-border ones, as well as intra-industry deals are more successful compared to cross-industry ones. In cross-industry deals the target’s belonging to one of innovation industries has a positive impact on the M&A performance. There is also a negative relationship between the relative size of the deal and the dynamics of performance indicators. It was also found that some factors such as the common language in cross-border deals, the age difference between participants and the number of deals in the sample involving the same buyer do not have any impact on the firm’s performance.