Industry differences in mergers and acquisitions

: m&a performance and synergies assessment

Abstract

Despite the extensive research about post-acquisition synergistic performance in M&A, there are not many studies about industry differences in each type of synergy. This report, prepared in collaboration with PricewaterhouseCoopers, during an internship in the Corporate Finance - M&A department, attempts to fill this gap in the literature and examine three issues. First it is examined which industries are more successful in M&A in general. Secondly, it is analysed which synergies standout the most inside an industry. And thirdly, it is studied which industries have the best performance in each type of synergy. It is also provided a new approach for examining performance, by analysing the medians and growth rates of the residual values (difference of actual and the predicted values) of the performance measures. Using post-merger, accounting-based indicators as a measure of performance, and proxies for operating, financial and tax synergies, this essay concludes that Transport, Freight, Storage & Travel Services is the industry with the best performance in general and the tax efficiency is the synergy with most value generation across the other types of synergies. It is also concluded that in the revenue-enhancement synergies and in tax synergies the Construction sector was the industry with more synergistic value creation and in financial synergies, was the Property Services sector. Measurement issues and directions for future research are also discussed in the end.

Date of Award	3 Oct 2016
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Paulo Alves (Supervisor) & Cidália Santos (Co-Supervisor)