Size and sector in the efficiency of mergers involving unlisted companies

Abstract

ABSTRACTAcademic research has mainly focused on merger processes undertaken by large companies listed in financial markets, taking in account principally the information provided by the quotation values. This article studies the merger processes of Spanish unlisted companies (SMEs and large) in the years 1999–2005 through the economic-financial analysis of their accounting data, that provides a better understanding of the variation experienced by companies in terms of efficiency, and explains the reasons that generate value-creation for their owners. From a counterfactual perspective the study compares performances of five indicators in a time span before and after the merger, according to size and sector aggregates. The main results drawn allow us to confirm that those companies resulting from merger processes have improved, or at least not worsened their efficiency and value creation, although the impact is different depending on size and sector. These evidences should have an effect on merger public policies.