Does company performance really improve following mergers? A pre-post analysis of differences in Greece


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Merger transactions occur in various business sectors and are a drastic way of corporate restructuring. For several companies, mergers are the only path to gaining access to new resources, improving profitability, and achieving business excellence. The purpose of this study is to investigate the mergers that occurred among companies and reveal different aspects of their final results beyond the traditional and simple comparison methods of analysis. Thus, several merger events from Greek companies are tracked and compared by evaluating various accounting measures from their published financial accounts. The preliminary statistical results from univariate data analysis with accounting comparisons reveal no significant business performance changes after mergers. Then, the merger event is examined per company from each year’s released financial statements with a not used before proposed method of analysis: comparison of pre- and post-merger performance by employing a heat-map with a multi-step approach. The results showed that five companies out of eighteen examined present a deterioration on separate sections of accounting performance (profitability, capital structure, and leverage). While univariate statistical analysis of comparison in pre- and post-merger performance failed to signalize these differences, the heat-map methodology approach with a multi-step approach revealed them. The obtained results show important differences in the accounting performance of almost one-third (27.8%) from the examined sample companies. Thus, the findings reveal the usefulness of the new proposed approach in merger analysis.

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    • Figure 1. Heat-map of the Z’ matrix (first step)
    • Figure 2. Heat-map of the Z’ matrix (second step)
    • Table 1. Accounting measures
    • Table 2. Descriptive statistics
    • Table 3. Comparison of the median for 16 accounting measures from pre- and post-merger period with Mann-Whitney tests
    • Table 4. Comparison of the mean for 16 accounting measures from pre- and post-merger period with t-tests
    • Table A1. Greek examined listed firms with a merger decision
    • Conceptualization
      Michail Pazarskis
    • Formal Analysis
      Michail Pazarskis, Nikolaos Giovanis, Haralampos Hatzikirou
    • Methodology
      Michail Pazarskis, Haralampos Hatzikirou
    • Writing – review & editing
      Michail Pazarskis, Haralampos Hatzikirou
    • Project administration
      Nikolaos Giovanis, Haralampos Hatzikirou
    • Supervision
      Nikolaos Giovanis, Haralampos Hatzikirou
    • Validation
      Nikolaos Giovanis
    • Data curation
      Panagiotis Chatzigeorgiou
    • Investigation
      Panagiotis Chatzigeorgiou
    • Resources
      Panagiotis Chatzigeorgiou
    • Writing – original draft
      Panagiotis Chatzigeorgiou