2
$\begingroup$

I am learning about financial analysis of mergers and acquisitions: most of the models are based on accounting principles and simple assumptions.

I wanted to delve deeper into more statistical/ econometric methods to analyse mergers from a company's point of view: how would profitability be affected, synergies, debt etc., what variables are usually taken into account etc. But I have no idea of how that is done (although I have studied econometrics before, I haven't studied it in this context).

I read an article by Christopher Rybak and Loren Smith titled "the Use of Econometrics in Merger Reviews" but this article is not from the company's point of view, it is from the regulator's point of view instead, focusing on the merger's impact on market competitiveness, anti-trust etc. They say that in this case, three things are usually used: Demand Estimation and Merger Simulation, Event Studies and Price-Concentration Studies and then goes on to explain them.

I wanted to know if similar to the regulator's point of view, there are also commonly used practices to analyse mergers from the company's point if view, and where can I learn about them

$\endgroup$
1
$\begingroup$

A good textbook for this sort of empirical research is Introductory Econometrics for Finance by Chris Brooks. That textbook helped me a lot when I was writing my thesis, which was actually on M&A (if they improve financial ratios for firms). I know writing a thesis is not exactly the same as actual research but reading your question I think you could find it useful.

$\endgroup$
1
  • $\begingroup$ Thanks! Your thesis sounds interesting, I was wondering if it was about how ratios will be affected by a potential merger or how the causal effect of past mergers? $\endgroup$ Mar 6 at 15:08

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.