The Impact of Acquirer\'s CEO Political Connections on the Performance of M&A Deals in the Russian Market

The Russian M&A market has been developing since 1992. Over the past twenty years, both the number of transactions and their average value have increased. Although the market size is growing, not all mergers and acquisitions increase the economic value of the acquiring company. One of the factors influencing the effectiveness of the transaction for the acquirer is the presence of political connections. The purpose of this work is to assess the influence of the political connections of the CEO of the acquiring company on the effectiveness of mergers and acquisitions in the Russian market. In this study, political connections refers to CEO connection. Their presence was established if at the time of the transaction or at any time in the past he or she was in the service of any government agency. The work uses the event study method; the effectiveness of transactions is studied in terms of the excess return of the company's shares (CAR) in a certain period before and after the announcement of the transaction. The study concludes that there is a significant negative impact of the political connections of the CEO of the acquiring company, which is a state-owned enterprise, on the effectiveness of mergers and acquisitions carried out by that company.