Результативность слияний и поглощений на российском фондовом рынке
Российский рынок слияний и поглощений зародился в середине 1990-х годов, и с того времени он постепенно становился все более устойчивым и цивилизованным. Однако российский рынок сравнительно малоизучен, и на нем сохраняется ряд проблем, связанных с результативностью слияний и поглощений. Поэтому цель данного исследования – изучить факторы, связанные с рыночной результативностью слияний и поглощений в России, чтобы облегчить процесс слияний и поглощений для отечественных компаний, а также предоставить практические рекомендации инвестиционным банкирам, менеджменту и потенциальным инвесторам.
Для достижения выбранной цели был проведен анализ российской и зарубежной литературы, сформулированы и протестированы гипотезы исследования на выборке российских компаний, осуществивших слияния и поглощения на российском рынке в период с 2005 по 2017 года. На основе полученных результатов были сформированы практические рекомендации.
Результаты исследования демонстрируют, что компании, которые проводят слияния и поглощения в аналогичных отраслях, в среднем, показывают более высокую результативность, поэтому, с учетом контекста, такие сделки предпочтительнее. Более того, наблюдается обратная взаимосвязь коэффициента P/B и результативности слияний и поглощений на российском рынке, а потому инвесторам нужно опасаться переоценки. Кроме того, компании, которые проводят сделки M&A в период рецессии, показывают большую результативность, чем те компании, которые инвестируют в благоприятные периоды. Наконец, отрицательная взаимосвязь между размером фирмы и результативностью слияний и поглощений может означать, что более крупные компании более легкомысленно относятся к проведению слияний и поглощений, а потому нуждаются в более тщательном анализе мотивов и причин данного вида сделок.
STATEMENT ABOUT THE INDEPENDENT CHARACTER OF THE MASTER THESIS ………..2 АННОТАЦИЯ …………………………………………………………………………………………………………………………..3 ABSTRACT ……………………………………………………………………………………………………………………………….4 INTRODUCTION ………………………………………………………………………………………………………………………6 CHAPTER 1. MERGERS AND ACQUISIONS ON THE RUSSIAN STOCK MARKET ……………..9
1.1. The concept of mergers and acquisitions ……………………………………………………………………….9
1.2. Types of mergers and acquisitions……………………………………………………………………………….10
1.3. M&A motives……………………………………………………………………………………………………………..12
1.4. The Russian market M&A overview ……………………………………………………………………………….17
1.5. M&A Performance valuation…………………………………………………………………………………………..19
1.6. Hypothesis formulation……………………………………………………………………………………………………27
CHAPTER 2. EMPIRICAL STUDY ON FACTORS OF M&A PERFORMANCE ON THE RUSSIAN STOCK MARKET …………………………………………………………………………………………………..30
5.1. Methodology ………………………………………………………………………………………………………………30
5.2. Period of analysis………………………………………………………………………………………………………..33
5.3. Sample description ……………………………………………………………………………………………………..35
5.4. Event study results ……………………………………………………………………………………………………..37
5.5. Descriptive statistics of the variables……………………………………………………………………………39
5.6. Regression analysis……………………………………………………………………………………………………..46
5.7. Discussion …………………………………………………………………………………………………………………..50
5.8. Managerial implications ……………………………………………………………………………………………..51
CONCLUSION…………………………………………………………………………………………………………………………52 REFERENCES …………………………………………………………………………………………………………………………54 APPENDIX 1 ……………………………………………………………………………………………………………………………59 APPENDIX 2 ……………………………………………………………………………………………………………………………60
In 2020 the Russian M&A market demonstrated a decrease in deal activity. The number of deals fell by 15% to 567 in 2020 compared to 2019 and total deal value declined by 5% to 59.7 billion USD. However, in such circumstances (pandemic, lockdown, drop in oil prices, the anticipation of new sanctions) the Russian M&A market performed relatively well. Thus, investors and management were able to adapt their business strategies to the new conditions and discover new opportunities.
The Russian M&A market is still developing and characterized by the following features:1
• high level of overpayment for target companies;
• decline in the volume of transactions over the last 8 years
• low efficiency of M&A deals from the point of view of shareholders.
The aforementioned problems can be solved by a deeper understanding of the processes in
the Russian M&A market. It is known that the Russian market is severely understudied, in comparison with the North American and European regions. The results obtained in developed foreign markets are not applicable to the Russian context, since many studies confirm that M&A is local. Even in the US market, there is no consensus on what the M&A performance is and what factors affect it. Some researchers believe that the M&A performance can be measured using either accounting or market measures. Others claim that M&A is a complex and multidimensional phenomenon that cannot be measured solely by accounting or market indicators, but motives and context play a very important role as well.
Factors that influence M&A performance are also varied and classified into firm, industrial and macroeconomic. However, researchers rarely investigate the impact of macroeconomic factors on M&A performance. Meanwhile, there is no evidence that macroeconomic factors do not influence the M&A process. In my thesis, this gap will be eliminated and the context of the environment will be considered. In addition, unlike many other M&A studies, this work aims to analyze the motives behind M&A, which can be divided into two main groups: knowledge and property-based motives.2 In recent years the percentage of knowledge-based M&As increased in the Russian market. Analysts expect that technology sectors such as FoodTech, EdTech, HealthTech, MediaTech, data analytics, and cloud solutions will continue to attract investor attention next year. Meanwhile, the Russian market experiences a lack of researches on knowledge M&A performance.
1
2 Gerbaud, R. R., & York, A. S. (2007). Stock market reactions to knowledge-motivated acquisitions. In Advances in mergers and acquisitions. Emerald Group Publishing Limited.
Pashtova, L. G., & Maimulov, M. S. (2020). M&A Market Efficiency in Russia: Problems and Prospects. Finance:
Theory and Practice, 24(1), 76-86.
6
The object of the Master Thesis is the M&A performance on the Russian stock market in the short-term and long-term perspective. The decision to study both in the short and long-term was made due to a lack of consensus on which approach best evaluates M&A performance. Researchers mainly analyze the short-term results of the acquirer’s activity, since they imply that the market reacts immediately and no other events affect the results. However, the buyer may have long-term goals, in this case, short-term time horizon is not applicable.
It should be noted here that M&A performance refers to the performance of the acquirer or joint venture, since on target companies post-M&A performance consistent results have been obtained. The target’s stock price rises sharply after the announcement of the acquisition.3 So, the subject of the research is the sample of Russian companies that have proceeded with the M&A.
The research goal of the thesis is to investigate the factors related to M&A market performance in Russia in order to facilitate the M&A experience of companies and to provide practical recommendations to investment bankers, management, and potential investors. The following steps were taken to achieve the research goal:
1. Study of the ‘M&A’ concept and comparison of the Russian and foreign interpretations;
2. Definition of the main approaches to the classification of M&A deals;
3. Investigation of the motives for M&A deals and the criteria for their classification;
4. Analysis of the current state and development trends of the Russian M&A market;
5. Analysis of the main approaches to measuring M&A performance;
6. Analysis of factors that can relate to M&A performance;
7. Justification and description of the research methodology and data collection;
8. Conducting empirical research to reveal relationships between M&A performance and
some factors related to company, industry, or macroeconomic environment;
9. Analysis of the results and drawing up theoretical and practical conclusions.
This research is based on the work of experts in the field of mergers and acquisitions,
business valuation, and corporate finance. A significant portion of the M&A literature is devoted to the study of the American market, therefore, most of the studies reviewed in this work are devoted to foreign markets. The following authors can be distinguished: Doukas and Lang (2003), Finkelstein and Haleblian (2002), Francoeur (2006), Fröhls et al. (1998), Gerbaud and York (2007), Lien and Klein (2006), Nagano and Yuan (2007), Seth et al. (2002).
The work contains three chapters. The first chapter examines the theoretical aspects of M&As: the interpretation of the concepts of ‘merger’ and ‘acquisitions’, the classification of deals, and an overview of their main motives. It also includes the analysis of the current state of the
3
Das, A., & Kapil, S. (2012). Explaining M&A performance: a review of empirical research. Journal of
Strategy and Management.
7
Russian M&A market. Finally, this chapter explores M&A performance valuation measures and drivers of M&A performance. The chapter concludes with the hypotheses of the research.
The second chapter begins with a description of the methodology and sampling. After that, the hypotheses of the study were tested on a sample of Russian companies that carried out mergers and acquisitions on the Russian market in the period from 2005 to 2017. The total number of observations in the sample was 93. Based on the results, theoretical and practical implications were formulated.
The study reveals that the concepts of “merger” and “acquisition” have different meanings in domestic and foreign scientific literature, and Russian legislation does not fully consider these terms. There are several classifications of M&As according to various criteria: the nature of the integration, the country of origin of participants, the resource pooling method, the attitude of the management personnel, etc. The motives for M&A deals are also varied. The work considered the main theories on M&A motives: Efficiency Theory, Agency Theories, Free Cash Flow Hypothesis, Market Power Hypothesis, Diversification Hypothesis, Information Hypothesis, Bankruptcy Avoidance Hypothesis.
The key construct in this research is “M&A performance”. In domestic and foreign literature there is no consensus on what is M&A performance and how to measure it. In this work, the event study method has been used to obtain abnormal performance. The positive or negative abnormal performance will indicate “good” or “bad” performance respectively.
The event study has been conducted on the sample of the Russian companies on the period of 2005-2017. The total number of observations amounted to 93. The results of the event study are the following: the long-term abnormal returns for 18 months, 24 months, and 24 months are significant at a 5% level. The means of abnormal returns are positive, thus, companies that conducted M&As on average perform better than their peers.
After a careful analysis of existing literature, the following factors of M&A performance have been chosen for research: acquirer to target relatedness, M&A motives, the price-to-book ratio of the acquirer, oil prices, and market conditions. The acquirer to target relatedness has been identified by a two-digit OKVED code. The M&A motive is a really wide concept, for this study, two main groups of motives have been identified: knowledge-based and property-based. Market conditions refer to a bullish or bearish market.
The research results show that companies that conduct mergers and acquisitions in related industries, on average, perform better, therefore, depending on the context, such deals are preferable. Moreover, there is an inverse relationship between the P / B ratio and the M&A market performance on the Russian market, and therefore investors need to be wary of overvaluation. In addition, companies that conduct M&A deals during a recession perform better than companies that invest in good times. Finally, a negative relationship between firm size and the performance of mergers and acquisitions may mean that larger companies are more careless about mergers and acquisitions, and therefore need a more thorough analysis of the motives and reasons for this type of deals.
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However, no difference was found in the performance of M&As with knowledge-based or property-based motives. Also, the market sentiment (bull or bear market) did not show any significant relationship with M&A performance.
To sum up, on the Russian market, as well as on other markets, the acquirer to target industry relatedness increases the chances of successful M&As, so, the similarities between acquirer and target is an important criterion in M&A analysis. Moreover, the result on negative relation between P/B and M&A performance can be a sign of presenting overvaluation on the Russian M&A market.
The specificity of the Russian market is that there is no difference in the performance of knowledge and property M&As, meanwhile, on the developed markets knowledge M&A underperform. Moreover, the macro environment, in particular oil prices, demonstrates a significant relationship with the M&A market performance which means that the macro factors are better taken into account when analyzing M&A in Russia.
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