Economic efficiency of mergers in the Czech Republic 2001–2010

Abstract

The paper presents partial results of research focusing on accounting, taxation and legal aspects of mergers in the Czech market. The input source is a database of mergers implemented in the Czech territory, which compiles data taken from the Trade Register for the decade of 2001–2010. The structure of the data allows for an evaluation of development trends of mergers in the Czech market, analysis of economic consequences of mergers and finding possible causes of their success or failure. From economic characteristics of merger success, we have chosen the item of net assets. Statistical testing of the hypothesis proved that mergers do not affect net assets during the period of three years after the merger implementation. A significant dependence of net assets development on mergers was proved after the basic set was stratified based on the size of companies. Mergers have a positive effect on the growth of value for owners in the group of small enterprises in the third year after the merger; the value in the group of medium enterprises also grows, but not significantly. Regarding large enterprises, the net assets even decreased in consequence of a merger.

Keywords:

• company transformations
• mergers and acquisitions
• macroeconomic environment
• economic effects of mergers
• net assets
• statistical analysis

JEL Classification:

• D22
• G34
• L21
• M21

Additional information

Notes on contributors

Jaroslav Sedláček

Jaroslav SEDLÁČEK. He is an Associate Professor at Masaryk University, Faculty of Economics and Administration, Department of Finance. He is the author of several monographs and articles in scientific journals and proceedings of international conferences. His scientific work is focused on the financial management of enterprises.

Petr Valouch

Peter VALOUCH. He is an Assistant Professor at Masaryk University, Faculty of Economics and Administration, Department of Finance. He publishes in scientific and professional journals, lectured at scientific conferences and is an author and co-author of technical books. He deals with the theory of financial accounting, financial analysis and taxation of individuals and business entities.

Maria Králová

Maria KRÁLOVÁ. She is an Assistant Professor at Masaryk University, Faculty of Economics and Administration, Department of Statistics. She is the author of several textbooks, scientific and professional articles and papers in proceedings of international conferences. She deals with the mathematical and statistical methods in economics and financial sciences.