Mergers in Greece: evaluation of the merger related performance of greek companies, accounting based methodology
This paper evaluates the financial results of 23 Greek merger transactions that were completed between 1993 and 1998 using the accounting based methodology. A set of 20 performance ratios is examined for a period of 5 years to get an indication of the mean weighted industry- adjusted performance difference between the pre- to post-merger period. Additionally, a cross-sectional analysis is performed to conclude on whether special characteristics of the merger participants are associated with improved post-merger performance. Profitability appears largely unaffected by merger activity. On a stand-alone basis, merged firms experience a bad profit record in the post-merger period. Merger participants' characteristics seem to be highly correlated with performance improvements. Large performance differences between acquirer and target are highly associated with improved post-merger performance of the new consolidated company. Fast-growing, efficient, profitable acquirers and low performance targets are related to increased post-merger weighted industry- adjusted performance. Absolute and relative size of the merger participants does not seem to be associated with merger outcomes.