The Research on Various Factors’ Influence on M&A Transaction Price
2010
Miečinskienė,Algita | Stukas,Dovydas
Mergers and acquisitions (further – M&A) are undoubtedly one of the most rapid ways to expand or enter into a new market. It is widely discussed how complex and sophisticated the processes of merger or acquisition are, so they cannot be executed without supervision of professional consultants, lawyers and accountants. Every transaction comprises many internal and external factors which have influence on the final price of M&A deal. The aim of this paper is to find out the importance level of various factors affecting M&A transaction price. Thorough research on 22 different factors has been carried out. All respondents were closely related to M&A transaction process. They were asked to specify how important, in their opinion, each factor for M&A transaction price was. The results show that the most important factors are financial state of a company, future growth prospects and sales profitability. It is solidly admitted that the least weight on M&A transaction price is given according to official financial analysts: research on company stocks, success on the stock market and “windows dressing“ before putting a company on sale. It was also noticed, that the rating of these factors depends on respondents’ experience and position in job.On the basis of the results, first and middle level managers concentrate more on financial factors and process execution, while the top-level managers deal with strategic matters.
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