The Analysis of Changes in Capital Structure of a Company After M&A Deal on Russian Market

This work aims to investigate the relationship between movements of capital structure and further corporate performance of a company after M&A deal in Russia. To study the relationship, the regression analysis was performed for a sample of Russian companies operating in 5 different industries, that have committed Merger or Acquisition deal in the year 2013. As the measures for capital structure Total debt ratio (TDR) and Debt-to-equity (DTE) ratio were taken. Return on Equity (ROE), Return on Assets (ROA) and Gross Profit Margin (GPM) were taken as the estimates for corporate performance of a company. The model also includes size of the company as a control variable, which is measured as a logarithm of total assets. Using panel data approach, this paper aims to test the hypothesizes, whether there exists relationship between capital structure variables (exogenous) and performance measures (dependent). Quantitative analysis shows, that there exists positive correlation between the capital structure adjustments and the financial performance. Moreover, the results show, that for different industries, the correlation coefficients and their significant are different. It means that the industry in which company operates is an important factor that influences the performance of the company. The findings of this paper are consistent with the most of previous studies on the subject.