Publication detail

The factors driving the synergy value in mergers of mechanical engineering companies in the Czech Republic

REŽŇÁKOVÁ, M. PĚTA, J.

Original Title

The factors driving the synergy value in mergers of mechanical engineering companies in the Czech Republic

Type

journal article in Scopus

Language

English

Original Abstract

Research into factors that influence the outcome of mergers and acquisitions conducted over a few past decades focused on two areas, one being the forecasting of the volume of expected investments, the other investigating M&A efficiency, i.e. the search for the factors that drive the growth of value of combined firms (identification of the sources of synergy). Operating synergies, resulting from cost savings and investment reduction, are deemed the primary source of synergy. Determining the synergy value is a prerequisite for identifying sources of savings. This paper presents the results of research aimed at determining the synergy value and identifying the factors representing potential sources of synergy. The discounted capital cash flow method was used to determine the synergy value In the set of 50 mergers carried out between 2004 and 2011 that we investigated, we found that a negative synergy effect developed at an average level of 8.13%. This means that most of these mergers were not associated with additional profits for the owners. The correlation between the selected financial ratios and the synergy value was tested. The results show that there is a statistically significant relationship between the indicators based on cash flow and the synergy value.

Keywords

mergers in mechanical engineering, effect of mergers, operating synergies, capital cash flow, value of synergies, Czech Republic.

Authors

REŽŇÁKOVÁ, M.; PĚTA, J.

Released

4. 9. 2018

Publisher

Centre of Sociological Research

Location

Szczecin

ISBN

2306-3483

Periodical

JOURNAL OF INTERNATIONAL STUDIES

Year of study

11

Number

3

State

Republic of Poland

Pages from

239

Pages to

254

Pages count

16

URL

http://www.jois.eu/?459,en_the-factors-driving-the-synergy-value-in-mergers-of-mechanical-engineering-companies-in-the-czech-republic

Full text in the Digital Library

http://hdl.handle.net/11012/178351

BibTex

@article{BUT149723,
  author="Mária {Režňáková} and Jan {Pěta}",
  title="The factors driving the synergy value in mergers of mechanical engineering companies in the Czech Republic",
  journal="JOURNAL OF INTERNATIONAL STUDIES",
  year="2018",
  volume="11",
  number="3",
  pages="239--254",
  doi="10.14254/2071-8330.2018/11-3/19",
  issn="2306-3483",
  url="http://www.jois.eu/?459,en_the-factors-driving-the-synergy-value-in-mergers-of-mechanical-engineering-companies-in-the-czech-republic"
}