VALUE RELEVANCE OF MERGERS AND ACQUISITIONS: ANALYSIS OF BRAZILIAN LISTED COMPANIES
Abstract
This research aims to analyze the association of Mergers and Acquisitions (M&A) with the value relevance of publicly traded companies listed on Brasil, Bolsa, Balcão, in the period from 2010 to 2021, considering that international literature shows an increase in value relevance after these processes. Through a quantitative, descriptive and documentary analysis, multiple regressions using Ordinary Least Squares were estimated based on value relevance models (Collins et al. 1997, 1999) for companies, groups of companies that carried out M&A and did not carry out these operations, such as characteristics intrinsic to M&A, distinguishing by the origin of the participating companies (domestic and international) and the type of operation (horizontal, vertical and conglomerate). As a result, it can be observed that companies that carried out M&A did not always have greater value relevance than the others, especially in the case of international and horizontal M&A. Companies acquiring international M&A have a greater value relevance than domestic ones, which can be explained by the higher risk of these operations. The research contributes with inputs for the strategic decision-making of companies that are considering carrying out M&A transactions through the careful selection of suitable partners, evaluation of potential synergies and identification of possible impacts on the book value of the companies involved. These results imply the analysis of risk and return on investments related to these operations, helping to understand how M&A is associated with value relevance, providing an improvement in the planning of internal and external decision makers within organizations.
Downloads
References
ALHADAB, M.; TAHAT, Y. The value relevance of unrealized gains and losses around the financial credit crisis: evidence from the UK. Corporate Ownership and Control, v. 14, n. 1-2, p. 351-359, 2016.
AVDASHEVA, S.; TSYTSULINA, D. The effects of M&As in highly concentrated domestic vis-à-vis export markets: by the example of Russian metal industries. Research in International Business and Finance, v. 34, p. 368-382, 2015.
BALL, R.; BROWN, P. An empirical evaluation of accounting income numbers. Journal of Accounting Research, 1968, p. 159-178.
BARTH, M. E.; BEAVER, W. H.; LANDSMAN, W. R. The relevance of the value relevance literature for financial accounting standard setting: another view. Journal of Accounting and Economics, v.31, n1-3, p. 77–104, 2001.
BARTOV, E.; CHENG, C. S. A.; WU, H. Overbidding in Mergers and Acquisitions: An Accounting Perspective. The Accounting Review, v. 96, n. 2, p. 55–79, 2021.
BEAVER, W. H. The Information Content of Annual Earnings Announcements. Journal of Accounting Research, v. 6, 67, 1968.
BEISLAND, A. A Review of the Value relevance Literature. The Open Business Journal, v. 2, p. 7-27, 2009.
BERESKIN, F.; BYUN, S. K.; OFFICER, M.S.; OH, J.M. The effect of cultural similarity on mergers and acquisitions: evidence from corporate social responsibility. Journal of Financial and Quantitative Analysis, v. 53, n. 5, p. 1995-2039, 2018.
BERGER, P.; OFEK E.; SWARY I. Investor valuation of the abandonment option. Journal of Financial Economics, 42, p. 257-287, 1996.
BERKOVITCH, E.; NARAYANAN, M. P. Motives for takeovers: An empirical investigation. Journal of Financial and Quantitative Analysis, v. 28, n. 3, p. 347-362,1993.
BREALEY, R. A.; MYERS, S. C.; ALLEN, F. Fusões, controle corporativo e governança. Princípios de Finanças Corporativas, Trad Ronald Saraiva de Menezes, 12 ed., AMGH Editora Ltda., p.771-773, 2018.
BÜCHLER, J. Business Wargaming for Mergers & Acquisitions: Systematic Application in the Strategy and Acquisition Process. Springer, 2022.
BURGSTAHLER, D.; DICHEV, I. Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics, v. 24, n. 1, p. 99–126, 1997.
CAPPELLESSO, G.; ROCHA, L. C. N.; DANTAS, J. A. Value relevance da Perda por Redução ao Valor Recuperável do Goodwill: evidências das Empresas Listadas na Bm&Fbovespa. Contabilidade Vista & Revista, v. 29, n. 3, p. 102-120, 2019.
CARTWRIGHT, S.; COOPER, C. L. The Impact of Mergers and Acquisitions on People at Work: Existing Research and Issues. British Journal of Management, v. 1, n. 2, p. 65-76, 1990.
CHATTERJEE, S. Types of synergy and economic value: The impact of acquisitions on merging and rival firms. Strategic Management Journal, v. 7, n.2, p. 119-139, 1986.
CHILD, J.; FAULKNER, D.; PITKETHLY, R. The management of international acquisitions: Realizing their potential value. Oxford University Press: New York, 2001.
CLOUGHERTY, J. A.; DUSO, T. Using rival effects to identify synergies and improve merger typologies. Strategic Organization, v.9, n. 4, p. 310-335, 2011.
COLLINS, D. W.; MAYDEW, E. L.; WEISS, I. S. Changes in the value-relevance of earnings and book values over the past forty years. Journal of accounting and economics, v. 24, n. 1, p. 39-67, 1997.
COLLINS, D. W.; PINCUS, M.; XIE, H. Equity Valuation and Negative Earnings: The Role of Book Value of Equity. The Accounting Review, v. 74, n. 1, p. 29–61, 1999.
DATTA, D. K., PINCHES, G. E., & NARAYANAN, V. K. Factors influencing wealth creation from mergers and acquisitions: A meta-analysis. Strategic Management Journal, v. 13, n. 1, p. 67–84, 1992.
DECHOW, P. M.; GE, W.; SCHRAND, C. M. Understanding earnings quality: a review of proxies, their determinants and their consequences. Journal of Accounting and Economics, v. 50, n. 2-3, p. 344-401, 2010.
DENG, P.; YANG, M. Cross-border mergers and acquisitions by emerging market firms: A comparative investigation. International Business Review, v. 24, p. 157-172, 2015.
DRANEV, Y.; FROLOVA, K.; OCHIROVA, E. The impact of fintech M&A on stock returns. Research In International Business And Finance, v. 48, p. 353-364, 2019.
EREL, I.; LIAO R. C.; WEISBACH M. S. Determinants of cross-border mergers and acquisitions. The Journal of Finance, v. 67, n. 3, p. 1045–1082, 2012.
ERNST, D.; HÄCKER, J. Applied international corporate finance (2nd ed.). Vahlen, 2011.
FÁVERO, L. P.; BELFIORE, P. (2022). Manual de análise de dados. Rio de Janeiro, RJ: LTC
GIL A. C. Métodos E Técnicas de Pesquisa Social. (6. Ed.) São Paulo: Atlas, 2011.
HALEBLIAN, J.; DEVERS, C. E.; MCNAMARA, G.; CARPENTER, M. A. DAVISON, R. B. Taking stock of what we know about mergers and acquisitions: A review and research agenda. Jounal of Management, v. 35, n. 3, p. 469-502, 2009.
HAMBRICK, D. C.; CROZIER, L. M. Stumblers and stars in the management of rapid growth. Journal of Business Venturing, v.1, n. 1, p. 31–45, 1985.
HITT, M. A.; HARRISON, J. S.; IRELAND, R. D. Mergers and acquisitions: A guide to creating value for stakeholders. Oxford University Press: New York, 2001.
HOLTHAUSEN, R. W.; WATTS, R. L. The relevance of the value-relevance literature for financial accounting standard setting. Journal of Accounting and Economics, v. 31, n. 1-3, p. 3–75, 2001.
HUSSAIN. T.; TUNYI, A. A.; SUFYAN, M.; SHAHAB, Y. Powerful bidders and value creation in M&As. International Review of Financial Analysis, v. 81, 102076, 2022.
JENSEN, M. C. Agency Costs of Overvalued Equity. Financial Management, v. 34, n. 1, p. 5-19, 2005.
JIRAPORN, P.; KIM, Y. S.; MATHUR, I. Does Corporate Diversification Exacerbate or Mitigate Earnings Management? An Empirical Analysis. International Review of Financial Analysis, v. 17, n. 5, p. 1087-1109, 2008.
JONG, A. D.; FLIERS, P. T. Predicting Takeover Targets: Long-Run Evidence from the Netherlands. De Economist, v. 168, p. 343–368, 2020
KHAN, Z.; RAO-NICHOLSON, R.; AKHTAR, P.; HE, S. Cross-border mergers and acquisitions of emerging economies’ multinational enterprises - The mediating role of socialization integration mechanisms for successful integration. Human Resource Management Review, v. 31, n. 3, p. 100578, 2021.
KWON, S. H.; WANG, G. The change in the value relevance of accounting information after mergers and acquisitions: evidence from the adoption of SFAS 141(R). Accounting & Finance, v. 60, n. 3, p. 2717-2757, 2018.
MOELLER, S. B.; SCHLINGEMANN, F. P.; STULZ, R. M. Firm TAM and the gains from acquisitions. Journal of Financial Economics, v. 73, n. 2, p.201–228, 2004.
OHLSON, J. A. Earnings, Book Values, and Dividends in Equity Valuation. Contemporary Accounting Research, v. 11, n. 2, p. 661–687, 1995.
RAUPP, F. M.; BEUREN, I. M. Metodologia da Pesquisa Aplicável às Ciências Sociais. In: Beuren, I. M. (Org.) Como Elaborar Trabalhos Monográficos em Contabilidade: Teoria e Prática. 3. ed. São Paulo: Atlas, 76-97, 2013.
RENNEBOOG, L.; VANSTEENKISTE, C. Failure and success in mergers and acquisitions. Journal of Corporate Finance, v. 58, p. 650-699, 2019.
SINGH, P. Does Poor Quality of Institutions Attract Cross-Border Mergers and Acquisitions? South Asian Journal of Macroeconomics and Public Finance, v. 1, n. 2, p. 191–230, 2012.
STATISTA. Number of merger and acquisition (M&A) transactions worldwide from 2010 to 2021. Finance & Insurance: Financial Services, 2022. Recuperado de https://www.statista.com/statistics/267368/number-of-mergers-and-acquisitions-worldwide-since-2005/#:~:text=Over%20500%2C000%20merger%20and%20acquisition,overall%2C%20exceeding%2063%2C000%20during%202021
TRANFIELD, D.; DENYER, D.; SMART, P. Towards a methodology for developing evidence informed management knowledge by means of systematic review. British Journal of Management, v. 14, n. 3, p. 207–222, 2003.
WESTON, J.; WEAVER, S. Mergers and acquisitions. The McGraw-Hill Executive MBA Series, McGraw-Hill, 2001.
XIE, E.; REDDY, K. S.; LIANG, J. Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions. Journal of World Business, v. 52, n. 2, p. 127-183, 2017.
YULIANTI, R.; WIDAGDO, A. K.; SETIAWAN, D.; SUTOPO, B. Value relevance of realized gains and losses on available-for-sale securities. Journal of International Studies, v. 13, n. 2, p. 81-97, 2020.
Downloads
Published
How to Cite
Issue
Section
License
Os Direitos Autorais para o artigo publicado nesta revista são do autor, com direito de primeira publicação para a revista. Em virtude do artigo aparecer nesta revista de acesso público, de uso gratuito, com atribuições próprias, em aplicações educacionais e não-comerciais. Assim, o autor que tiver artigo aprovado no processo editorial autoriza a Revista Contexto a publicar a versão revisada do seu artigo. O autor que submete artigo para a Revista Contexto consente e declara que ele não foi publicado na íntegra em outro periódico e assume total responsabilidade por sua originalidade e teor, podendo incidir sobre o autor eventuais encargos decorrentes de reivindicação, por parte de terceiros, em relação à autoria do mesmo.
