Mergers and acquisitions: An efficiency evaluation

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Junior, Paulo Rotela
Pamplona, Edson de Oliveira
da Silva, Aneirson Francisco [UNESP]

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This article sheds light on how synergies arise through mergers and acquisitions (M&A). Enterprises go through the process of Mergers and Acquisitions (M&A) with the goal of improving performance, increasing efficiency and obtaining business synergy. Prior literature suggests that synergies could arise due to taxes, market power or efficiency improvements. This study evaluates the efficiency of M&A in Brazil among publicly-traded companies. We used models with multiple objectives from Goal Programming and Data Envelopment Analysis (GPDEA), employing accounting indicators as input and output variables, and thus evaluated the emergence of synergy gains. These models allow us to analyze and classify the M&A according to the efficiency obtained in such processes. Some of the M&A cases analyzed were mistakenly considered efficient when used traditional models. And, as expected, the GPDEA was proved to be superior to classical models; however it was noticed that few of the cases investigated were proved to be effective. We presented a new application for multi-objective approach that can be used to assess mergers and acquisitions. The dual-application of GPDEA provided a greater understanding of efficiency generation in synergy creation by means of M&A.



Data Envelopment Analysis, Goal Programming, Merger and Acquisition, Multiple-Objective Optimization, Synergy

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Applied Mathematics, v. 4, n. 11, p. 1583-1589, 2013.