Companies from emerging markets, such as China, India, Malaysia, Russia and South Africa, use mergers and acquisitions (M&A) as one of the main instruments to grow and enter global markets. After the global financial crisis in 2008, companies from emerging markets initiated over 25% of M&A deals volume between developed and emerging markets companies.
M&A decisions are vital for long-term development of emerging market companies. Recent empirical research shows that companies from developed and emerging markets have different motives and seek different types of synergy in M&A deals.
Companies from United States and Europe usually look for economies of scale. On developed, low-growth markets one reliable way to higher profits is to reduce costs with economies of scale. Companies from emerging markets look for market competences that they are lacking: technologies, brands, business models or skilled employees. Therefore, there is a need to identify determinants of synergy creation in M&A deals initiated by emerging markets companies.
This article aims to systematize existing literature about synergy and validate theoretical model suitable for synergy valuation and regression analysis of M&A deal in Russia. We review academic research on M&A synergy, identify major factors of synergy creation and methods of synergy valuation in emerging markets, analyze differences in major factors of synergy creation for developed and emerging markets.
Attraction of investments is one of the key problems which have to be solved to continue development of Russian electric utilities sector. High uncertainty of tariff price caps regulation and volatility of prices of energy sources have a negative impact on investment climate in this sector. However real option analysis (ROA) allows to implement management flexibility under constantly changing environment and look at risks of investment in utilities from another point of view.
This paper provides a review of literature on ROA applications to valuation of investment projects and management decisions. Particularly an approach to valuation of GENCO is considered, implementing real options (spark spread options) on electricity price with strike which depends on price of energy sources. Major attention of researches attracted also to options to switch from one energy source to another including renewable sources. Energy efficiency plays an important role in development of electric utilities sector. That is why methods of valuations of investments in energy efficiency are considered.
Key words: real options analysis, spark spread options, irreversible investments, energy efficiency, electric utilities
The purpose of this work focuses on the determination the formation of the optimal value premium in M & A transactions, in terms of the oil and gas sector, through the identification of financial and non-financial factors that have a direct impact on the premium rate.
The article discusses the evolution and the state of the art of IR (Investor Relations) in Western and Russian companies. IR is considered as a particular area of corporate communicational practice and a field of academic research. Author reviews the history and stages of IR as corporate activity, IR functions and models of company’s interaction with an investment community. The main objective of the article is to compare the features of a professional institutionalization and the current state of IR in Russia and in other countries.
The empirical part of the research is based on the information from the Internet sites of the first hundred of the largest (in terms of sales) Russian companies entering the RAEX-600 rating.
The main findings of the article are: (1) the Russian professional IR-community is in the start yet, though its institutional basis is already created: there are the professional association and the magazine, as well as a number of special courses in some educational programs of Moscow universities; (2) the amount of academic researches (journal papers and dissertations) from 2003 to 2015 is quite moderate; the dynamics of research interest is influenced by the financial crisis of 2008-2009; (3) the practice of providing information to investors on the sites of Russian companies is not unified; noticeable distinctions are revealed in structure and volume of IR-sites’ content; (4) as a whole, the substance of information intended to investors of the largest Russian companies on their websites is generally consistent to Western practice of IR.
This paper presents the results of the study related to investigation of relational capital influence on a company’s value. Relational capital is regarded not just as the company’s relationship framework but also as an issue closed to social capital which implies extracting implicit knowledge, ideas, innovations and decisions. This allows us to analyze an impact that this kind of capital has on the company’s value indirectly that is through knowledge creation, accumulation and exchange process. The results show that relational capital could be considered as the enhancer of the knowledge creation, its extraction and implementation hidden in the company’s external relations. Moreover, it could be able becoming a driver of the company’s value growth even without the company’s orientation on knowledge management.
The aim of the study is to investigate the influence of cross-listing (depositary receipts issue) on the market value of russian companies. The article contains recent dynamics description, literature review, and description of event-study algorithm. We analyze 34 Russian companies, which issued depositary receipts during the period 1996 - 2012. The result is that cumulated average abnormal return is positive on the event window [-10; 10] days. Thus, market evaluates the event positively, market value of companies increases after the cross-listing abroad.
The paper presents the results of the study of mergers and acquisitions’ impact at the fundamental value of acquiring companies at BRICS countries. The research is based on the Residual Income Valuation (RIV) model. At the sample of 366 M&A deals, related to the period of 2009 – 2012, it was revealed that mergers and acquisitions resulted in the growth of fundamental value per share of acquiring companies. Also the factors, causing the value creation or decrease, were undermined, among which there was the company’s size, the mode of deal funding, the industrial specifics and the method of payment.
Recently, the valuation of intellectual capital is one of the urgent problems of financial management. This is due to the complexity of determining cash flows and discount rates. The proposed method solves these problems by using the approach based on the logic of the value chain. Draw conclusions on whether the analyzed company-oriented personnel or relies on its key asset, as well as what share of the value of the company generates intellectual capital.
This paper features a non-parametric DEA method and its practical applications for the efficiency estimation of the Rus-sian companies managing pension funds. Theoretical aspects of the five DEA models are studied, including: the constant returns to scale model (CRS); increasing, decreasing and varying returns to scale (DRS, IRS and VRS), and the free dis-posal hull (FDH). A comparative analysis of the models features an example of 39 pension funds management compa-nies from the 2004 to 2016. The efficiency has been estimated taking into account the management companies specific. The financial indicators responsible for the financial activity of the companies have been studied along with those of the pension fund portfolio management. The model under consideration is characterized by one input variable (the invest-ment amount in the first quarter) and three output variables: net assets value (NVA), return on investment (quarterly), and the account balance at a credit organization. The external factors that have impact on the company performance in the sector have been the focus of the recent research, rather than the company efficiency estimation itself. The returns and the risk of the company portfolio, as well as the net assets and the crisis indicators of the economy have been chosen as the qualitative criteria for estimating the efficiency of the companies.The selected DEA algorithm modifications can be used for further investment and management decision making process.
The topic of payout policy significance in terms of value creation has been developing for 50 years already. This development has led to the establishment classic theories that explain different patterns in the companies’ payout policy choices: signaling, agency costs theory, clientele theory and catering theory. However, tests results are not always consistent among different authors, which means that these theories cannot be used universally. Classic theories assume that all agents on the market are fully rational, which is rather unrealistic. These two facts led to the development of behavioral explanation of the payout policy choice. This approach focuses on the behavioral characteristics of managers that are responsible for the decision-making process in the company. Thus, the payout policy according to this approach is considered as the function of behavioral characteristics of managers (overconfidence, optimism, risk preferences, etc.) rather than the function of the financial variables.
This particular article is the review of researches that cover classic and modern theories of payout policy. The article covers the logic of the development of different views on the payout policy. The author covers articles that test different theories, analyzes main results and conclusions, investigates the reasons for the development of these theories. The main focus has been made on the behavioral approach which is considered as the most fruitful direction for the future research. The authors also cover the methodology of existing papers, variables that measure behavioral characteristics and results.