engleski

The impact of M&A on company performance: evidence from Croatia

Mergers and acquisitions (M&A) represent very popular form of corporate development and in the recent years their importance and value have reached enormous proportions. One of the main reasons why companies involve in M&A activities is to improve their performance. However, empirical studies yield inconsistent results regarding this issue. While some studies reported beneficial influence of M&A on companies' success, the others found this influence to be neutral or even negative. Furthermore, the majority of studies analysed M&A activity in USA and UK, therefore this paper aims to detect the consequences of M&A on the performance of companies operating within under-researched European area i.e. Croatia. The analysis was conducted on Croatian companies that were involved in M&A activity in period from 2008 to 2011. All data for the analysis were gathered from FINA, Amadeus and Zephyr database. The obtained results clearly indicated statistically insignificant differences in target companies' performances before and after M&A activity. The same results, i.e. statistically insignificant differences, were obtained even when performance of target companies (after acquisition) was compared to the peer companies which were selected in order to control for industry, size and pre-event performance. Finally, the results showed that despite the growing influence of foreign investors in Croatian economy, the majority of M&A activity was carried out by Croatian companies.

M&A ; performance ; target companies ; Croatia

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