Assessment synergetic effect in mergers and acquisitions of commercial banks

Student: E`jvazova Narmina

Supervisor: Imeniy Otchievich Familiev

Educational Programme: Bachelor

Year of Graduation: 2014

The research paper will consider theoretical aspects of mergers and acquisitions and will assess the synergy of these deals.The goal of research is to identify mergers and acquisitions assessment methods, including the study of these deals performance after the merger.The objectives of the research are:•         to consider the terms of mergers and acquisitions;•         to formulate the main drivers of mergers and acquisitions (M&A) deals implementation;•         to analyze existing M&A deals assessment approaches and to identify the most applicable one;•         to analyze the synergy assessment in M&A deals for effectiveness and validity of deals determining;In practical part we will investigate an assessment of efficiency of mergers and acquisitions in the banking sector.This research paper it will examine the empirical analysis of the method of cumulative abnormal return.The study period is 2000 to 2013. The object of the research is the Eastern Europe market. The study will examine 20 mergers and acquisitions.From analysis above the following conclusions could be drawn:Firstly, analysis of mergers and acquisitions of the Russian banking system is difficult because of Russian banking system follows the extensive way of development since late 80-ies of XX century to the present day.Secondly, the synergy assessment by accumulated excess returns method showed that target banks receive a number of benefits and vice versa in case of acquiring banks after making mergers and acquisitions.Thirdly, in order to neutralize the size effect, large banks were excluded from the sample. Large banks have significant competitive advantage over smaller banks.After the exclusion of the large banks, a synergistic effect is observed for both target banks acquiring banks.Fourthly, it should be noted that the assessment of mergers and acquisitions is the most successful in Western countries, particularly in the United States of America. The reason for this is the fact of a rich theoretical and empirical history of mergers and acquisitions assessment questions research.

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