Merger and Acquisition Synergy Study: the Case of Ukraine

Abstract

The article examines theories and mechanisms of mergers and acquisitions, analyzes recent publications of international and national scholars and experts, provides various points of view on definition and interpretation of mergers and acquisitions, and offers the author's version of this concept. The article considers synergies that are competitive from an economic point of view, analyzes trends and the latest M&A schemes, suggests possible scenarios in the Ukrainian market, problems and ways to solve them, and draws certain conclusions. Merger and acquisition (M&A) have become a foremost strategic alliance for business, product and logistics in global environment. Using meta-literature review, a general analysis was carried out on M&A to assess motives, methods, financing sources, announcement effects, cross-border competitions, success-failure, valuation issues, and business strategies. It is highlighted in the study the main problems and weaknesses of Ukrainian companies that hinder effective IPOs are the following: a requirement on the part of domestic legislation to issue shares of companies in the national currency; prohibition by Ukrainian legislation to issue more than 25% of shares abroad; the need for the company to comply with all the requirements of a public company; the need to demonstrate stable and long-term dynamics of financial indicators and other components of financial statements; availability of financial resources to go through all stages of preparation and conduct of the IPO (5-20% of the placement amount); inconsistency of the provisions of national legislation with the requirements of foreign stock exchanges; differences in accounting and tax reporting with foreign companies. Despite the fairly widespread global use of M&A transactions in the corporate sector, Ukrainian market is not yet able to effectively use them as a tool for crisis management and preservation of the economic potential of companies due to serious legal gaps, economic problems of corporate and public administration, high political and financial risks of an unstable economy, low business culture and ethics.