Field Of Mergers Research Articles

Specifics of Due Diligence procedure in mergers and acquisitions in the Russian Federation

Aim. To study the elements and main features of the Due Diligence procedure, including mandatory and additional stages of due diligence of Russian companies, as well as taking into account the peculiarities of the Russian legislation and regulatory bodies.Objectives. To perform an in-depth theoretical analysis of the main tasks of the Due Diligence procedure in M&A of enterprises; to develop proposals for improving the methodology of the Due Diligence procedure in the Russian Federation (RF).Methods. The authors used general scientific research methods, including data collection and processing, content analysis, generalization, systematization, analysis of legislation and legal practice in the field of mergers and acquisitions, as well as the experience of Russian enterprises in conducting the Due Diligence procedure.Results. The Due Diligence procedure is an important stage of corporate transactions in the M&A process in Russia. The article shows that one of the key features is the necessity to take into account specific legal and tax aspects of the Russian legislation when conducting due diligence. It is necessary to take into account not only the risks, but also the influence of state regulators and regulatory bodies on the results of the transaction. Based on the results of the analysis and systematization of the information obtained, general methods and recommendations in the course of the Due Diligence procedure were determined. The statistical data on M&A transactions in Russia are considered, the attention is emphasized on the importance of Due Diligence at the rapid growth of M&A transactions. It is proved that the Due Diligence procedure increases the transparency of Russian companies and contributes to the improvement of the investment climate in the country.Conclusions. The study of the peculiarities of Due Diligence in M&A in Russia allows us to focus on the importance of legal analysis, financial and economic evaluation, as well as personnel and corporate culture assessment. Legal analysis provides an opportunity to identify and assess legal risks and problems related to the company's operations. Financial and economic analysis and audit help to identify and assess financial risks and problems, current and potential. Personnel and corporate culture assessment helps to understand how well they are aligned with the business objectives and strategy of the transaction. All three areas of assessment must comply with the requirements of domestic legislation and take into account the specifics of the labor market in Russia. A proper Due Diligence assessment of all three areas will help to detect possible risks and problems related to legal, financial and personal aspects of the company's activities, as well as provide a reliable basis for making correct and informed decisions regarding the M&A transaction.

Antitrust Vigilance: Scrutinizing Anti-Competitive Impacts in Indian and International M&A for Equitable Economic Expansion

The field of mergers and acquisitions (M&A) has witnessed significant growth and evolution in recent decades, driven by globalization, technological advancements, and changing market dynamics. The increasing interconnectedness of economies, the rise of digital platforms, and the pursuit of strategic synergies have fuelled a surge in M&A activity across industries and regions. This has prompted policymakers, regulatory authorities, and industry stakeholders to scrutinize M&A transactions more closely to ensure they do not unduly harm competition, consumer welfare, or market stability. Moreover, the evolving landscape of competition policy, regulatory frameworks, and enforcement mechanisms has added complexity to the M&A process, requiring companies to navigate a myriad of legal, regulatory, and operational challenges when pursuing cross-border transactions. Against this backdrop, understanding the principles of antitrust vigilance, the regulatory frameworks governing M&A transactions, and the ethical considerations involved is essential for stakeholders involved in the deal-making process. Furthermore, the COVID-19 pandemic has reshaped the M&A landscape, with disruptions to supply chains, changes in consumer behavior, and economic uncertainties impacting deal activity and strategic priorities. As companies adapt to new market realities and navigate the challenges posed by the pandemic, there is a heightened need for vigilance in assessing the competitive implications of M&A transactions and promoting a competitive marketplace that fosters innovation, economic growth, and consumer welfare. In light of these developments, this dissertation aims to provide a comprehensive examination of anti-trust vigilance and regulatory frameworks in Indian and international mergers and acquisitions, exploring the complexities, challenges, and ethical considerations involved in managing M&A transactions for equitable economic expansion. By analyzing key concepts, principles, case studies, and future directions, this dissertation seeks to contribute to the advancement of knowledge and inform policy debates on competition policy, regulatory reform, and corporate governance in the context of M&A transactions.

Advantages and Disadvantages Analysis and Legal Risks of LBO

The leveraged buyout (LBO) is an important and genius operation in the field of mergers and acquisitions. Companies expand and optimize their performance with the help of LBOs. The market as well as the society can also benefit from LBOs. But however, all coins have two sides. There are a lot of negative cases that illustrate that the LBO is not an impeccable operation. Shareholders benefit can be harmed and there are insider buyouts when managers impose on their shareholders as they are privileged with their insider power. This paper is going to discuss the advantages and disadvantages of LBOs.

Study on Securities Laws and Regulations in the Field of Mergers and Acquisitions of Multinational Enterprises in China

As Chinese reform and opening up continues to bear fruit, more and more multinational enterprises are merging and acquiring domestic enterprises to achieve their expansion purposes, which also promote international trade to a certain extent. Meanwhile, in the continuous practice of transnational M&A activities, the problem of state regulation of this activity has gradually emerged, particularly under the legal regime of securities law is more obvious. To facilitate the progress and development of foreign M&A, it is necessary to regulate transnational M&A activities reasonably and effectively in China. The first part of this paper describes the three remarkable stages in the past decades of its development, then analyzes the regulatory features of the current legal system of securities law in China from the horizontal and vertical perspectives, and the subject as well as object views. Moreover, it presents the shortcomings of the existing regulations. After elaborating the basic overview of the Chinese securities law system, the reasons for the inadequacy of the existing regime are analyzed including the objective regulatory requirements of the market, the urgent need to correct the dual-track legislation model, and the gap with other developed countries. Finally, constructive suggestions are made for the reform of the legal system. The essay adopts the legal norm analysis method, aiming at proposing feasible measures to improve the law system. At present, there are large loopholes and gaps in the fields of securities law for foreign investors’ M&A, so the research topic of this paper is of practical urgency and certain practical significance.

Technology Transfer in Foreign Higher Education Institutions: The Example of Catholic University of Leuven

The convergence of the scientific, educational and business sectors requires the search for new models and tools for the transfer of technology from the university environment to the work of enterprises in the real sector of the economy. On the example of the Catholic University of Leuven, approaches to the commercialization of the results of the intellectual activity of universities abroad are considered. It is shown that the active development of its own technology transfer center, which implements, among other things, initiatives in the field of mergers and acquisitions, has allowed KU Leuven to achieve outstanding results in creating its own innovation environment and take leading positions in the global rankings of world universities. The results obtained can be successfully transferred to the practice of Russian universities.

Event study methodology in M&A research

Subject. The article presents the basic principles of the event research methodology, which is one of the most popular empirical tools in corporate finance, and mergers and acquisitions. Objectives. The article introduces the main methodologies for calculating expected and abnormal returns, the main approaches for testing abnormal returns and measuring the statistical significance of the results, and it also notes the advantages and limitations of the methodology. Methods. Based on a content analysis of the top classical works in event analysis, the main algorithm and research approaches of the method are presented. The basic concept has been expanded taking into account the results of modern work aimed at improving the methodology. The applicability of the method and its relevance were verified based on the analysis of spotlight publications for 2015–2020. Results. The article provides a review of the latest developments in M&A research. It highlights the main modern trends in the application of the event analysis method. The methodology is shown to be easy to use, with market data used for analysis available in major financial databases. This allows for empirical research with a large sample of securities. In addition, stock prices reflect the direct expectations of investors and best reflect the value created by the event when compared to financial statement analyses that are often misstated. Conclusions and Relevance. It is concluded that the event analysis method remains the key methodology in the field of mergers and acquisitions and is actively used by researchers. Improved econometric approaches allow for increased statistical significance and more accurate results.

Event study methodology in M&A research

Subject. The article presents the basic principles of the event research methodology, which is one of the most popular empirical tools in corporate finance, and mergers and acquisitions. Objectives. The article introduces the main methodologies for calculating expected and abnormal returns, the main approaches for testing abnormal returns and measuring the statistical significance of the results, and it also notes the advantages and limitations of the methodology. Methods. Based on a content analysis of the top classical works in event analysis, the main algorithm and research approaches of the method are presented. The basic concept has been expanded taking into account the results of modern work aimed at improving the methodology. The applicability of the method and its relevance were verified based on the analysis of spotlight publications for 2015–2020. Results. The article provides a review of the latest developments in M&A research. It highlights the main modern trends in the application of the event analysis method. The methodology is shown to be easy to use, with market data used for analysis available in major financial databases. This allows for empirical research with a large sample of securities. In addition, stock prices reflect the direct expectations of investors and best reflect the value created by the event when compared to financial statement analyses that are often misstated. Conclusions and Relevance. It is concluded that the event analysis method remains the key methodology in the field of mergers and acquisitions and is actively used by researchers. Improved econometric approaches allow for increased statistical significance and more accurate results.

World fintech: main trends

Recently, digital technologies in the fi nancial sector have been actively developing. The pandemic of a new coronavirus infection COVID-19 only spurred this process. The result of these events was the structural transformation of the global fi nancial services market, which is the object of this study. The subject of the study is the processes taking place in this market as a result of its digital transformation and the development of fi nancial technologies. Analysis, synthesis, induction, deduction were used as research methods. The multidisciplinary nature of the study should be noted due to the interconnection of sectors such as information technology, fi nancial technology, economic aspects. The study examines the basic characteristics of fi ntech solutions introduced into the practice of the world business, an ecosystem of fi nancial services, reveals the features of such models of the development of fi nancial innovations as USChinese, European and Russian. The impact of the pandemic of a new coronavirus infection of COVID-19 on the fi nancial services market was analyzed, it was noted that fi nancial and technological leaders of this sector of the economy can benefi t from the current situation. New criteria for the optimality of fi nancial services are highlighted, in particular, international nature, round-the-clock access, instant conversion with minimal costs and the presence of both fi at money and cryptocurrency. The volume of the global fi ntech market was analyzed, as well as forecasts regarding its development in the future, the volume of global investments in fi ntech in the fi eld of mergers and acquisitions was considered. The main directions of the fi ntech segment development according to the results of the 2019 study were considered and the countries in which this segment is developing most actively were highlighted. The evolution of traditional banks and revealed fi ntech trends in the banking industry in 2020.

A Systematic Review of Research on Sustainability in Mergers and Acquisitions

The field of mergers and acquisitions and sustainability has been expanding in the last years; consequently, there is a need for a systematic review of the existing body of knowledge. This article aims to fill this gap by providing an overview and synthesis of the research topic. The specific objectives are (1) to assess the academic impact, and (2) to determine the structure of the topic. To achieve these goals, a bibliometric analysis will be carried out through a selection of articles taken from the WoS database from 1900 to 2019. First, the historical evolution of publications will be addressed, the distribution of articles by journal and by individual author, as well as the total number of citations per article. Second, this article will develop networks of co-citations of authors and journals and co-word analysis by using VOS Viewer software. The global results will provide insights into the nature and trends of research on mergers and acquisitions and sustainability.

Threats of hostile takeover in context of the business economic security

Purpose: the article contains critical analysis and scientific review of research in the field of mergers and takeovers in the world academic literature and identifies the key factors causing the probability of losing a business in terms of business security in modern conditions of economic relations transformation. The following tasks have solved in the article to achieve this goal: scientific review and classification of academic studies on the problem of hostile takeovers in the interdisciplinary aspect of economic security have performed; key endogenous and exogenous factors that determine the threat of seizing business and the mechanisms for its protection against hostile takeovers have identified; possibilities of applying international experience in protecting against hostile takeovers under Russian conditions have analyzed.Methods: the article uses a set of scientific methods for analyzing literary sources and statistical data, among which are: methods of induction and deduction, logical abstraction, causal, functional, system, historical and comparative analysis, etc.Results: authors have identified endogenous and exogenous factors that increase the likelihood of hostile takeover, and have analyzed the impact of legislation and regulations on the activity of mergers and acquisitions in Russia and the world. The scientific review carried out by the authors is positioned in the existing set of studies and sets the directions for future research in the field of the economic security of business that are necessary for understanding this phenomenon.Conclusions and Relevance: Russian and foreign studies in the field of mergers and acquisitions differ in the methods and form used to substantiate the findings and results of research. The problems of business security and protection against hostile takeovers have interdisciplinary nature, while the threats of hostile takeovers can be both external and internal. Improving the legal framework along with economic mechanisms will allow creating conditions for protecting the interests of investors, enhancing business activity and business efficiency. The measures used in world practice for protection against hostile takeovers are of limited use in Russia due to the relative youth of the phenomenon itself and the domestic capital market, as well as due to the specifics of Russian legislation. In this regard, it is necessary to continue further research in this sphere.

DEVELOPMENT OF APPROACHES TO PERSONNEL MANAGEMENT BEFORE THE PHASE OF THE MERGING PROCESS OF ENTERPRISES

Purpose. Modern business is increasingly focusing on alternative options for integration among corporate growth stimulation measures, in particular, through the formation of new strategic alliances, collaboration with enterprises and start-ups, as well as through mergers or acquisitions. That is why the research is aimed at solving problems of effective management of personnel in the process of merger of enterprises, in particular, in the machine building industry by merging, takeover or otherwise integrating business, as well as at developing modern approaches to personnel management in business mergers. HR systems should be adapted to the specific conditions of the merger or takeover of business structures, taking into account the relevant phases of the process of enterprise integration. Methodology. The methodological basis of the study consist of general scientific methods of analysis and synthesis, comparative study of the economic processes in the management of personnel in the conditions of mergers and takeovers of business structures. The empirical method is used to describe the problem of taking into consideration the management of particular features of individual phases of the process of enterprise integration. This monographic study of a defined problem has given an opportunity to obtain results of practical significance and scientific value. Results. The necessity of taking into account the specifics of the individual phases of the merger of enterprises in the management of integrated business personnel is substantiated. It has been obtained the further development of HR-tools, HR-methods, and HR-practices, the use of which during the business mergers will help to address the shortage of key skills and improve the efficiency of the integrated business. Practical implications. Applied guidance on human resources management can be successfully implemented in the machine-building enterprises of Ukraine in the process of their merger with the aim of creating a more efficient integrated entity. The results of the study provide an opportunity to clearly outline the peculiarities of the phases of the process of business combining, which necessitate the use of appropriate HR-tools, HR-methods, and HR-practices for the integrated business. Originality. The novelty of the results is the conceptual scheme of the personnel decision-making in the conditions of organizational changes in the combination of machine-building enterprises taking into account the three-phase process of their integration. The article focuses on the crucial importance of using HR-practices in accordance with the phases of the merger process to ensure the success of mergers and takeovers, resulting in new business combinations. The article explores HR-practices in the field of mergers and takeovers, which create new business combinations. The expediency of using HR-tools and HR-methods is proved for domestic enterprises operating in the field of machine-building, which are interested parties of integration processes. The developed human resources recommendations make it possible to increase the organizational efficiency of functioning of newly formed and already existing associations of machine-building enterprises.

One Year on

Competition enforcement is a broad church. Each of us—lawyers and economists, business people, and public officials—has a different and valuable perspective to offer. But there is one basic conviction that we all share: competition matters to people’s daily lives. That is why, at the confirmation hearing before the European Parliament, I said that my main task as commissioner would be to protect competition in the interests of consumers and businesses. And as the past year has shown, competition enforcement can change things for the better, without compromising on fair and transparent processes. My concern has been to ensure that our work is firmly grounded on independence, fairness, transparency, legal certainty, and due process. As part of this respect for due process, I am scrupulously careful not to comment on details of ongoing investigations. Independent enforcement is also one of the main objectives of our forthcoming initiative to help national competition authorities enforce the EU competition rules more effectively. At the same time, no public authority has unlimited resources. We have to focus on the most important issues, with the greatest impact on people’s lives. Enforcing competition rules is about protecting consumers. To ensure that they are not harmed by artificially high prices or by limited access to the products they want. The most serious competition infringements remain at the heart of our work. Cartels are the antithesis of competitive markets. They remove any incentive to innovate, invest, or otherwise serve customers’ needs. Naturally, busting cartels is a very important priority. For example, we adopted a decision in October 2015 against optical disc drive manufacturers that colluded to rig tenders. Every day millions of EU citizens use devices with optical disc drives like desktop computers, laptops, and games consoles. Keeping these markets competitive is therefore important. This is just one example of cartels affecting mass markets. Competition enforcement also contributes to the Commission’s 10 key priorities for action, including a better single market for both on-line services and energy. Action is needed to ensure that consumers have access to a wide choice of goods and services at the best possible prices. They are also the areas where we need action at the EU level to make a real difference. So, when it comes to tackling abuses of dominant market positions, we have pressed ahead with a number of cases in energy and digital markets. In April, we sent a Statement of Objections to Gazprom about partitioning Central and Eastern European gas markets, for example by reducing customers’ ability to resell gas cross-border. This may have enabled Gazprom to charge unfair prices in certain Member States. We also took action on Bulgaria’s energy markets. In March, we sent a Statement of Objections to Bulgarian Energy Holding (BEH) about hindering competitors’ access to key gas infrastructure. And in December, we closed a separate antitrust case against BEH, concerning electricity, after the company committed to make it easier to trade electricity, improve price transparency, and promote integration with neighbouring countries’ markets. Turning to the digital economy, we sent a Statement of Objections to Google in April alleging abuse of a dominant position in the market for general internet search by systematically favouring its own comparison shopping product, thereby stifling competition and harming consumers. We also formally opened a separate investigation into Google’s conduct as regards the mobile operating system Android. And, we launched an e-commerce sector inquiry into barriers to accessing goods and services on-line across borders. In the field of mergers, our cases are to some extent chosen for us, by the deals that parties choose to do. With the worst of the economic crisis behind us, merger activity is picking up and we have dealt with a number of important cases in energy and telecoms markets. Consolidation has been a major theme in Europe’s telecom markets this year. Operators claim that they need scale to invest in better quality, speed, and coverage. We will always listen to their arguments; but we will also check their claims against market realities and consumers’ interests.

Untangling micro-behavioral sources of failure in mergers and acquisitions: a theoretical integration and extension

Research in the field of mergers and acquisitions (M&A) has extensively examined potential sources of failure and success. However, despite increasing attention from scholars, only a handful of studies have actually investigated M&A processes. Adopting a process perspective is crucial to unraveling the underlying micro-behavioral foundations of M&A. This paper focuses on why M&As rarely reach their full potential. Specifically, we address these issues by providing an in-depth review of mechanisms contributing to M&A failure and developing a processual framework. We argue that behavioral factors at the individual and organizational levels impede rational and effective decision-making before, during and after an acquisition and suggest that communication climate plays a vital role in facilitating effective integration and may serve as a platform to improve M&A performance.

Tax-optimal step-up and imperfect loss offset

AbstractIn the field of mergers and acquisitions, German and international tax law allow for several opportunities to step up a firm’s assets, i.e., to revaluate the assets at fair market values. When a step-up is performed the taxpayer recognizes a taxable gain, but also obtains tax benefits in the form of higher future depreciation allowances associated with stepping up the tax base of the assets. This tax-planning problem is well known in taxation literature and can also be applied to firm valuation in the presence of taxation. However, the known models usually assume a perfect loss offset. If this assumption is abandoned, the depreciation allowances may lose value as they become tax effective at a later point in time, or even never if there are not enough cash flows to be offset against. This aspect is especially relevant if future cash flows are assumed to be uncertain. This paper shows that a step-up may be disadvantageous or a firm overvalued if these aspects are not integrated into the basic calculus. Compared to the standard approach, assets should be stepped up only in a few cases and — under specific conditions — ata later point in time. Firm values may be considerably lower under imperfect loss offset.

Mergers and Acquisitions - The Standing of Theory in the Quest for Better Institutions and Policy

The paper shows that the standing of theory in the field of mergers and acquisitions is weak for at least three reasons. Research is best described as a battlefield of ad hoc theory testing leaving behind a fragmented field. Research has focused traditionally on high intensity markets under the Anglo-Saxon variant of capitalism. Empirical evaluation is prone to be inexact and suffers among other from significant aggregation problems between the micro (firm performance) and macro level (economic growth). The deficiencies in the standing of theory will be reflected in weak institutions to handle the political processes concerning value, liquidity, efficiency and fairness aspects that affect the market for corporate assets within and across different variants of capitalism.