Domestic M&As in Russia: Performance and Success Factors

P. 189–220.

Rodionov I. I., Mikhalchuk V. B.

This research develops an approach to synergy analysis in domestic Russian mergers and acquisitions (M&As), tests potential success factors, and evaluates two types of operating and three types of financial synergies. This chapter makes two primary contributions to the literature. First, this chapter is related to the recent research that investigates M&As in emerging markets. Our chapter is unique in that we study domestic Russian M&As based on long-term firm accounting data. This approach captures private companies and small deals that make up the majority of the Russian M&A market. The second contribution is to estimate the structure of operating and financial synergies for every deal and test the significance of potential success factors. The scope is limited to domestic Russian M&As closed between January 2006 and September 2015. The sample is based on the Mergermarket database and includes 171 deals. Our analysis shows that after M&As, firms achieve −0.1% capital expenditure efficiency and −0.2% operating margin compared to the industry benchmark. Deals lead to 11.7% abnormal reduction of capital expenditures and cause 3.1% cost of debt growth. Deals create small tax benefits: the median for the whole sample is 87.5 million rubles, or 1.4% of the median deal value.

Keywords: mergers and acquisitions

In book

Strategic Deals in Emerging Capital Markets. Are There Efficiency Gains for Firms in BRIC Countries?

Ivashkovskaya I., Grigorieva S. Switzerland: Springer, 2020.