Determinants of the Payment Method in Mergers and Acquisitions

The present work is focused on the analysis of the factors influencing the choice of the method of payment for M&A. The paper provides an overview of existing studies on the problem of choosing the method of payment. Analysis of determinants is based on a linear regression model with cross-sectional data. Based on the results of the analysis, the model for the optimal choice of the method of payment was constructed in order to maximize the benefits of both partners within the framework of the ongoing restructuring. The purpose of this work is to identify and describe the determinants of the method of payment, as well as empirical testing of the model for choosing a payment method based on the example of a certain company and comparing the results with real transactions conducted on the market. To achieve this goal, it seems necessary to solve the following tasks: 1. Carrying out a descriptive characterization of key methods of payment for M&A transactions. 2. Structuring and description of the main theories of choosing the method of payment for M&A transactions. 3. Identification and empirical testing of the factors that determine the choice of a method of payment for M&A transactions. 4. Formation of the optimal choice model of the method of payment of M&A transactions. 5. Testing of the optimal choice model of the method of payment of M&A transactions on the example of a certain company and comparing the results with results of an actual transaction. As a result of the analysis, it was concluded that when choosing the method of payment in M&A transactions in developing countries, the following factors are significant: the share of cash in the structure of total assets, the relative size of the transaction, investment opportunities, the asymmetry of information, the current liquidity level of the acquiring company, the company's share in the hands of its management, profitability and internationality of the transaction.