Prediction of Synergies in Mergers

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216305%3A26510%2F20%3APU136465" target="_blank" >RIV/00216305:26510/20:PU136465 - isvavai.cz</a>
Result on the web
<a href="https://www.sav.sk/journals/uploads/0325114602%2020%20Reznakova%20+%20SR.pdf" target="_blank" >https://www.sav.sk/journals/uploads/0325114602%2020%20Reznakova%20+%20SR.pdf</a>
DOI - Digital Object Identifier
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Result language
angličtina
Original language name
Prediction of Synergies in Mergers
Original language description
In this paper we present a method of calculating the value of synergy resulting from mergers between private companies as well as a model for the prediction of potential synergy values in contemplated mergers (M&A deals). We first examined the process of determining the value of a synergy. Since we analysed mergers involving private mechanical engineering companies, we used the discounted capital cash flow method for the determination of the synergy value. We divided the selected mergers according to the achieved synergy value into two groups, i.e. into successful mergers and failed mergers. We then analysed the two groups in order to identify financial ratios with statistically significant differences (deviations). We then used those ratios to establish a rule for the differentiation between mergers that would increase in business value, i.e. with positive synergy, and those whose value would decrease. A decision rule was developed using the classification and regression trees method. In the research sample, the developed model distinguished successful merger from failed ones with 92% accuracy.
Czech name
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Czech description
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Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
50206 - Finance

Publication year
2020
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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