Macroeconomic Determinants of Mergers and Acquisitions Activity in Russia

The M&A market and the activities of companies are always influenced by a variety of factors, one of the main and most important of which is macroeconomic factors. This study examines the macroeconomic determinants of M&A activity in Russia, taking into account different types of deals and key industries, as well as Russia-specific macroeconomic determinants such as oil prices, exchange rates, political uncertainty and sanctions. The negative binomial model is used to analyse quarterly data for 1995-2023 on M&A transactions involving Russian companies. The results show that Brent oil price fluctuations and economic policy uncertainty have a significant impact on the volume of M&As, with sanctions exacerbating this impact. Political uncertainty has a different impact on deals in the industrial sector, which is likely due to industry-specific factors. In addition, the strengthening of the US dollar against the rouble is reducing M&A activity abroad. Despite external challenges, companies can mitigate risks by diversifying their business and implementing robust risk management strategies.