The Effect of Mergers and Acquisitions on Companies’ Fundamental Values in Emerging Capital Markets (The Case of BRICS)

GSOM Emerging Markets Conference 2015: Business and Government Perspectives

10 Pages Posted: 5 Nov 2015

See all articles by Daria Luzina

Daria Luzina

National Research University Higher School of Economics

Elena Rogova

National Research University Higher School of Economics

Date Written: October 15, 2015

Abstract

The study is aimed at the assessment of the effect of mergers and acquisitions on the fundamental value of acquiring companies in BRICS countries. The approach based on the residual income model was applied. The pre-acquisition expected fundamental value of the acquiring company and its realized post-acquisition fundamental value are compared.

The study is fulfilled on the sample of 366 M&A deals in BRICS countries, collected from Zephyr, Bloomberg and Thompson Reuters databases. Econometric modeling is applied to reveal factors causing the value creation or destruction among which there were the company’s size, the mode of deal funding, the industrial specifics and the method of payment.

Keywords: emerging capital markets, BRICS countries, fundamental value, residual income valuation model

JEL Classification: G34

Suggested Citation

Luzina, Daria and Rogova, Elena, The Effect of Mergers and Acquisitions on Companies’ Fundamental Values in Emerging Capital Markets (The Case of BRICS) (October 15, 2015). GSOM Emerging Markets Conference 2015: Business and Government Perspectives, Available at SSRN: https://ssrn.com/abstract=2686032

Daria Luzina

National Research University Higher School of Economics ( email )

Soyza Pechatnikov str., 15
St. Petersburg, 190068
Russia

Elena Rogova (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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