Merger Efficiency Research Articles

Factors for improving the efficiency of M&A transactions

Subject. This article deals with the issues of conducting mergers or acquisitions in order to expand business in various sectors of the economy. Objectives. The article aims to study the factors of improving the efficiency of mergers and acquisitions. Methods. For the study, I used the methods of retrospective, systems, functional and structural analyses, as well as observation, classification, grouping, sampling, comparison and generalization, evolutionary and dynamic analysis. Results. The article presents the results of an analysis of the global volume of M&A transactions and models of geographical representation from 2015 to 2023. The elements that affect and improve the performance of M&A transactions are recognized and classified on the basis of both local and international practices. The article also describes two categories of factors that maximize the effectiveness of mergers and acquisitions. Conclusions. A detailed study and planning of the factors included in the presented groups will contribute to the most effective implementation of mergers and acquisitions.

Black hole-black hole mergers with and without an electromagnetic counterpart: A model for stable tertiary mass transfer in hierarchical triple systems

Triple stars are prevalent within the population of observed stars. Their evolution compared to binary systems is notably more complex and is influenced by unique dynamical, tidal, and mass transfer processes inherent in higher order multiples. Understanding these phenomena is essential for comprehensive insight into multistar evolution and the formation of energetic transients, including gravitational wave (GW) mergers. Our study aims to probe the evolution of triple star systems when the tertiary component fills its Roche lobe and transfers mass to the inner binary. Specifically, we focus on the impact of tertiary mass transfer on the evolution of the inner orbit and investigate whether it could lead to the formation of GW sources with distinct properties. To achieve this, we developed an analytical model that describes the evolution of the inner and outer orbits of hierarchical triples undergoing stable mass transfer from the tertiary component. We have publicly released this model as a python package on Zenodo. Utilising population synthesis simulations, we investigated triples with a Roche-lobe filling tertiary star and an inner binary black hole (BBH). These systems stem from inner binaries experiencing chemically homogeneous evolution (CHE). Our analysis encompasses two distinct populations with metallicities of $Z=0.005$ and $Z=0.0005$, focusing on primary components in the inner binary with initial masses ranging from 20 to $100\ M odot $ and inner and outer orbital separations of up to $40\ R odot $ and $10^5\ R odot $, respectively, targeting the parameter space where chemically homogeneous evolution is anticipated. Our results indicate that for the systems we studied, the mass transfer phase predominantly leads to orbital shrinkage of the inner binary and evolution towards non-zero eccentricities and is accompanied by an expansion of the outer orbit. In the systems where the inner binary components evolve in a chemically homogeneous manner, 9.5<!PCT!> result in mass transfer from the tertiary onto an inner BBH. Within this subset, we predict a high formation efficiency of GW mergers ranging from 85.1<!PCT!> to 100<!PCT!> at $Z=0.005$ and 100<!PCT!> at $Z=0.0005$ with short delay times, partly attributable to the mass transfer phase. Owing to the rarity of triples with a CHE inner binary in the stellar population, we project local merger rates in the range of 0.69 to 1.74 $ Gpc^ $. Of the prospected BBH mergers that enter the LISA and aLIGO frequency band due to GW emission, a fraction is still accreting gas from the tertiary star. This could produce a strong electromagnetic (EM) counterpart to the GW source and maintain high eccentricities as the system enters the frequency range detectable by GW detectors. The occurrence of EM signals accompanying mergers varies significantly depending on model assumptions, with fractions ranging from less than 0.03<!PCT!> to as high as 46.8<!PCT!> of all mergers if the formation of a circumbinary disc is allowed.

The merger-specificity of efficiencies: ensuring consistency of assessment between regulatory concerns, efficiency claims and remedial commitments

Companies pursue mergers and acquisitions as a way to unlock benefits not available to them on a standalone basis. Competition regulators assess such deal rationales both for the purpose of understanding whether a transaction may have detrimental effects on competition and whether any associated benefits may outweigh such concerns. This article analyses the economic rationales that the European Commission has relied on for the assessment of whether efficiency claims are merger-specific and explains how its reasoning also is important for the assessment of any effects the transaction may have on competition. Despite the strict evidentiary standard for merger efficiency claims raising significant obstacles to the success of such claims, demonstrating the merger-specificity of claimed merger efficiencies can therefore nonetheless be valuable as a way to ensure the analytical rigour that may demonstrate that there is no competition issue for any efficiency claim to resolve in the first place or that any such issues can be addressed through appropriate remedies.

Binary Mergers in the Centers of Galaxies: Synergy between Stellar Flybys and Tidal Fields

Galactic centers (GCs) are very dynamically active environments, often harboring a nuclear star cluster and supermassive black hole at their cores. Binaries in these environments are subject to strong tidal fields that can efficiently torque its orbit, exciting near-unity eccentricities that ultimately lead to their merger. In turn, frequent close interactions with passing stars impulsively perturb the orbit of the binary, generally softening their orbit until their evaporation, potentially hindering the role of tides to drive these mergers. In this work, we study the evolution of compact object binaries in the GC and their merger rates, focusing for the first time on the combined effect of the cluster’s tidal field and flyby interactions. We find a significant synergy between both processes, where merger rates increase by a factor of ∼10−30 compared to models in which only flybys or tides are taken into account. This synergy is a consequence of the persistent tides-driven eccentricity excitation that is enhanced by the gradual diffusion of j z driven by flybys. The merger efficiency peaks when the diffusion rate is ∼10−100 slower than the tides-driven torquing. Added to this synergy, we also find that the gradual softening of the binary can lift the relativistic quenching of initially tight binaries, otherwise unable to reach extreme eccentricities, and thus expanding the available phase space for mergers. Cumulatively, we conclude that despite the gradual softening of binaries due to flybys, these greatly enhance their merger rates in GCs by promoting the tidal-field-driven eccentricity excitation.

How does exchange rate fluctuation affect the efficiency of Chinese enterprises' overseas mergers and acquisitions

With the changes in the global trade environment, the impact of exchange rate on cross-border mergers and acquisitions (M&A) of enterprises cannot be ignored. Taking Chinese listed enterprises as the research sample, we establish a model of the impact of exchange rate fluctuations on the efficiency of overseas mergers and acquisitions. The findings are as follows: (1) Exchange rate fluctuation significantly affects the completion rate of M&A. (2) Exchange rate fluctuations play an important role in shortening the time of overseas M&A. (3) Exchange rate volatility significantly affects M&A efficiency in high-income countries and highly competitive industries.

Can consumer surplus decrease with merger efficiencies?

This paper investigates the impact of mergers on consumer welfare within a Cournot model, considering mergers driven by anticipated efficiency gains and potential post-merger entry. In this framework, we demonstrate that: (i) modest efficiencies can make both merger and entry beneficial, benefiting consumers; (ii) moderate efficiencies may deter entry, harming consumers due to the merger; and (iii) significant efficiencies may discourage entry but lead to lower prices, benefiting consumers. This result, therefore, embodies an important policy implication that assessing the overall effect of a merger on consumer surplus requires evaluating merger-specific synergies alongside the likelihood of post-merger entry.

Impact of gas hardening on the population properties of hierarchical black hole mergers in active galactic nucleus disks

Hierarchical black hole (BH) mergers in active galactic nuclei (AGNs) are unique among formation channels of binary black holes (BBHs) because they are likely associated with electromagnetic counterparts and can efficiently lead to the mass growth of BHs. Here, we explore the impact of gas accretion and migration traps on the evolution of BBHs in AGNs. We have developed a new fast semi-analytic model, that allows us to explore the parameter space while capturing the main physical processes involved. We find that an effective exchange of energy and angular momentum between the BBH and the surrounding gas (i.e., gas hardening) during inspiral greatly enhances the efficiency of hierarchical mergers, leading to the formation of intermediate-mass BHs (up to 104 M⊙) and triggering spin alignment. Moreover, our models with efficient gas hardening show both an anticorrelation between the BBH mass ratio and the effective spin and a correlation between the primary BH mass and the effective spin. In contrast, if gas hardening is inefficient, the hierarchical merger chain is already truncated after the first two or three generations. We compare the BBH population in AGNs with other dynamical channels as well as isolated binary evolution.

Executive network centrality and corporate merger and acquisition efficiency: A governance effect or collusion effect?

This paper empirically analyzes the impact of executive network centrality on corporate merger and acquisition efficiency by constructing an empirical econometric model. The research results show that the enhancement of executive network centrality is conducive to the governance effect, thereby significantly improving the efficiency of corporate mergers and acquisitions. The results of heterogeneity analysis indicate that the role of executive network centrality in enhancing corporate merger and acquisition efficiency is more pronounced in non-state-owned enterprises and enterprises with political connections.

Demographics of three-body binary black holes in star clusters: implications for gravitational waves

ABSTRACT To explain both the dynamics of a globular cluster and its production of gravitational waves from coalescing binary black holes, it is necessary to understand its population of dynamically formed (or, ‘three-body’) binaries. We provide a theoretical understanding of this population, benchmarked by direct N-body models. We find that N-body models of clusters on average have only one three-body binary at any given time. This is different from theoretical expectations and models of binary populations, which predict a larger number of binaries (∼5), especially for low-N clusters (∼100), or in the case of two-mass models, low number of black holes. We argue that the presence of multiple binaries is suppressed by a high rate of binary–binary interactions, which efficiently ionize one of the binaries involved. These also lead to triple formation and potentially gravitational wave captures, which may provide an explanation for the recently reported high efficiency of in-cluster mergers in models of low-mass clusters ($\lesssim 10^5\, {\rm M}_\odot)$.

Corporate Digital Transformation and M&A Efficiency: Evidence Based on Chinese Listed Companies

In order to help enterprises to achieve high-quality development and improve the capital market regulatory policies by supporting with more factual basis from China, this paper conducts research on clarifying impact mechanism of digital transformation on M&A efficiency of listed companies. Taking the mergers and acquisitions of listed companies from 2007 to 2021 as a research sample, the influence mechanism of the digital transformation degree of companies on their M&A efficiency was studied. The research results show that the digital transformation of listed companies will improve their M&A efficiency. Digital transformation will reduce the degree of mispricing stocks of M&A companies, curb conflicts between managers and agents of M&A companies, and improve their M&A efficiency. Further research finds that the promotion effect of digital transformation on M&A efficiency is more significant in non-state-owned companies, with a higher degree of financing constraint and high analyst attention. In the future, regulatory authorities should actively promote the digital transformation of listed companies, curb mispricing and management agency problems in the capital market with digital governance, and improve the efficiency of mergers and acquisitions in the capital market. This paper not only provides a more factual basis on concrete case from China but also enriches the related empirical analysis on corporate digital transformation and M&A efficiency.

The Efficiency of Horizonal Mergers: Evidence from Mengniu Dairy's Merger with Milkground

Contemporarily, the dairy industry is a compulsory industry that relevant to the daily life of human beings. In particular, the dairy industry is a signature industry for the modernization of Chinese agriculture. Local production in China's dairy industry holds a huge market potential. In this paper, the efficiency of the horizontal mergers is investigated of Chinese dairy industry. To be specific, the case of Mengniu Dairy's Merger with Milkground is selected. Mengniu Group is the leading company in China's dairy industry and Milkground is the number one brand of domestic cheese. In recent years, there have been more and more cases of horizontal mergers and acquisitions. The value of horizontal mergers and acquisitions to the development of a company lies in making up for the lack of asset allocation. This paper will analyze the effectiveness of Mengniu's horizontal merger with Milkground through three financial indicators. According to the analysis, the corresponding suggestions will be given accordingly. Overall, these results shed light on guiding further exploration of horizontal merger.

Build, borrow, buy: the case for merger efficiencies

Abstract

M&A transactions in the Russian market: The impact of corporate boards’ attributes

The paper delves into the impact of corporate boards’ attributes on the efficiency of mergers and acquisitions (M&A) transactions in the Russian market and formulates recommendations on improving corporate governance practices in Russia. The article bridges a gap in research on boards of directors whose characteristics serve as strong signals to the capital market about the quality of corporate governance and protection of investors’ interests. Methodologically, the study rests on agency theory and the theories of mergers and acquisitions. The research hypotheses about the effect of board characteristics on M&A transactions were tested using the least square method to construct a linear regression. The transaction efficiency was assessed using the cumulative abnormal return (CAR) model. The empirical data were retrieved from Annual Reports and ZEPHYR Bureau van Dijk and covered 55,436 mergers and acquisitions from 2000 to 2020, of which 659 transactions satisfied the strict criteria and were selected for further analysis. We found a statistically significant relationship between the board characteristics of the acquiring company and the efficiency of mergers and acquisitions. The obtained results contribute to the development of a new research avenue on network-based interaction between boards of the companies participating in transactions and the involvement of boards of other firms.

Compact object mergers: exploring uncertainties from stellar and binary evolution with sevn

ABSTRACT Population-synthesis codes are an unique tool to explore the parameter space of massive binary star evolution and binary compact object (BCO) formation. Most population-synthesis codes are based on the same stellar evolution model, limiting our ability to explore the main uncertainties. Here, we present the new version of the code sevn, which overcomes this issue by interpolating the main stellar properties from a set of pre-computed evolutionary tracks. We describe the new interpolation and adaptive time-step algorithms of sevn, and the main upgrades on single and binary evolution. With sevn, we evolved 1.2 × 109 binaries in the metallicity range 0.0001 ≤ Z ≤ 0.03, exploring a number of models for electron-capture, core-collapse and pair-instability supernovae, different assumptions for common envelope, stability of mass transfer, quasi-homogeneous evolution, and stellar tides. We find that stellar evolution has a dramatic impact on the formation of single and BCOs. Just by slightly changing the overshooting parameter (λov = 0.4, 0.5) and the pair-instability model, the maximum mass of a black hole can vary from ≈60 to ≈100 M⊙. Furthermore, the formation channels of BCOs and the merger efficiency we obtain with sevn show significant differences with respect to the results of other population-synthesis codes, even when the same binary-evolution parameters are used. For example, the main traditional formation channel of BCOs is strongly suppressed in our models: at high metallicity (Z ≳ 0.01) only <20 per cent of the merging binary black holes and binary neutron stars form via this channel, while other authors found fractions >70 per cent.

Search for gravitational-wave bursts in the third Advanced LIGO-Virgo run with coherent WaveBurst enhanced by machine learning

This paper presents a search for generic short-duration gravitational-wave (GW) transients (or GW bursts) in the data from the third observing run of Advanced LIGO and Advanced Virgo. We use a coherent WaveBurst (cWB) pipeline enhanced with a decision-tree classification algorithm for more efficient separation of GW signals from noise transients. The machine-learning (ML) algorithm is trained on a representative set of noise events and a set of simulated stochastic signals that are not correlated with any known signal model. This training procedure preserves the model-independent nature of the search. We demonstrate that the ML-enhanced cWB pipeline can detect GW signals at a larger distance than previous model-independent searches. The sensitivity improvements are achieved across the broad spectrum of simulated signals, with the goal of testing the robustness of this model-agnostic search. At a false-alarm rate of one event per century, the detectable signal amplitudes are reduced up to almost an order of magnitude, most notably for the single-cycle signal morphologies. This ML-enhanced pipeline also improves the detection efficiency of compact binary mergers in a wide range of masses, from stellar mass to intermediate-mass black holes, both with circular and elliptical orbits. After excluding previously detected compact binaries, no new gravitational-wave signals are observed for the twofold Hanford-Livingston and the threefold Hanford-Livingston-Virgo detector networks. With the improved sensitivity of the all-sky search, we obtain the most stringent constraints on the isotropic emission of gravitational-wave energy from short-duration burst sources.

Factors for improving the efficiency of mergers and acquisitions

Developed in modern conditions, such a new form of enterprise reorganization as mergers and acquisitions has many positive aspects for business, including savings on resources, market share growth and much more. However, not all mergers and acquisitions have high efficiency, some of them are unsuccessful. The reason for this is a variety of factors affecting the effectiveness of influence and acquisition transactions. This article is devoted to the study of these factors. The author discusses the essence and main characteristics of mergers and acquisitions. The dynamics of the volume and territorial representation of mergers and acquisitions in the world in 2015-2022 are analyzed. On the basis of foreign and domestic experience, the author identified and systematized factors that influence the level of efficiency of mergers and acquisitions and contribute to its improvement. The author identified two groups of factors contributing to the greatest efficiency of mergers and acquisitions: factors of efficiency improvement at the initial stage; factors of efficiency improvement at the stage of implementation and subsequent transaction support. Detailed study and planning of the factors included in these groups will contribute to the most effective implementation of the mergers and acquisitions transaction, as well as increase its efficiency in the future.

Investment merger efficiency evaluation of energy enterprises: From a perspective of energy internet

Evaluating the efficiency of energy enterprises’ investment merger in the energy Internet sector can be a visual measure of the effectiveness of their investment merger in this sector. It is crucial for energy enterprises to achieve strategic transformation and expand their market share. To this end, this study aims to investigate the efficiency of energy enterprises’ investment merger in the energy Internet sector by constructing an efficiency evaluation index system and evaluation model with the characteristics of the sector. Based on which the TOPSIS model is used to distinguish the differences in the efficiency of the same enterprises’ investment merger in different years. The results of the validation on international power enterprises show that the size of the enterprise has an important influence on its investment merger efficiency in this field. In addition, the evaluation index system and method constructed prove to be effective in evaluating and differentiating the annual investment merger efficiency of energy enterprises in the energy Internet field.

Dynamical double black holes and their host cluster properties

ABSTRACT We investigate the relationship between the global properties of star clusters and their double black hole (DBH) populations. We use the code NBODY6 to evolve a suite of star cluster models with an initial mass of $\mathcal {O}(10^4)$M⊙ and varying initial parameters. We conclude that cluster metallicity plays the most significant role in determining the lifespan of a cluster, while the initial half-mass radius is dominant in setting the rate of BH exchange interactions in the central cluster regions. We find that the mass of interacting BHs, rather than how frequently their interactions with other BHs occur, is more crucial in the thermal expansion and eventual evaporation of the cluster. We formulate a novel approach to easily quantify the degree of BH-BH dynamical activity in each model. We report 12 in-cluster and three out-of-cluster (after ejection from the cluster) DBH mergers, of different types (inspiral, eccentric, and hierarchical) across the 10 N-body models presented. Our DBH merger efficiency is 3–4 × 10−5 mergers per M⊙. We note the cluster initial density plays the most crucial role in determining the number of DBH mergers, with the potential presence of a transitional density point (between 1.2 and 3.8 × 103 M⊙ pc−3) below which the number of in-cluster mergers increases with cluster density and above which the increased stellar density acts to prevent in-cluster BH mergers. The importance of the history of dynamical interactions within the cluster in setting up the pathways to ejected DBH mergers is also discussed.

Market Misreaction? Evidence from Cross-Border Acquisitions

Our goal in this paper is to answer this research question: Do investors understand the longer-term value-implications of cross border mergers and acquisitions, as at the time of their announcements? We examine acquirers’ operating efficiencies around and after cross-border acquisitions and relate this to the announcement-period stock-market reaction. Using a dataset of cross-border mergers and acquisitions (M&A) entailing U.S. acquirers over the period 1990–2013, and using a bootstrapped-DEA (Data Envelopment Analysis) model because any one indicator may not reflect the whole performance of the merger, we find that the operating efficiency of the acquirers decreases around the acquisition, and up to three years after. However, we document evidence of stock market mis-reaction at announcement: the announcement-period acquirer abnormal stock-price return is not significantly associated with acquirer’s operating efficiency post-acquisition. Therefore, investors should be careful interpreting the announcement-period stock-price reaction in cross-border mergers and acquisitions as indicative of merger efficiency gains.

A Support Vector Machine model for classification of efficiency: An application to M&A

One of the main issues in banking and finance sector is measuring the efficiency of mergers and acquisitions (M&A), due to a plethora of key performance indicators (KPI) and variables. In this study, the efficiency of 441 M&A deals is evaluated based on specific inputs and outputs, including the change of environmental and social governance (ESG) scores. Due to presence of negative data, two Data Envelopment Analysis (DEA) and second stage analyses have been applied. The first is a regression model, which examines the impact of control variables on the efficiency of DEA scores. The second is a Support Vector Machine (SVM) model, mapping efficiency based on gender diversity. Results indicate that the performance of M&A deals is positively affected by both gender diversity and relative size whereas is negatively affected by the deal value. The SVM model classification indicates which regions of efficiency and stability are reflected by good or bad representation of women on boards.