The impact of related and unrelated mergers and acquisitions on company productivity: Panel data evidence from the UK

Girma, Michael (2006) The impact of related and unrelated mergers and acquisitions on company productivity: Panel data evidence from the UK. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

This dissertation reports on the impact of mergers and acquisitions on the general

productivity and more specially labour productivity of acquiring firms in UK for the

period 1981-1996. It reviews existing theoretical and empirical literature on the post

merger performance in terms of productivity, accounting profits, stock return studies and

labor productivity. The empirical section of this report uses an unbalanced panel of 887

plants taken from Data Stream for accounting information and London Share Price Data

Base for information relating to mergers and acquisitions. The investigation is carried out

in two ways:

1. First, the empirical models will assess if there is a permanent shift in productivity

following a company's acquisition to related or unrelated business;

2. Secondly the sample is analysed according to size, industry type and finally, the

effect is observed by time period.

I found 6 principle results emerge from the analysis:

1. First, acquiring firms performance in terms of total factor productivity increases

post merger compared to pre merger performance and firms that don't undertake

any merger.

2. Second, performance increase of related mergers is more prominent than

unrelated mergers.

3. Third, when the acquisition is taking place in smaller firms post merger

productivity and labor productivity is higher than post merger performance of

larger firms.

4. Fourth, when mergers occur in service industry post merger performance is lower

than mergers occurring in manufacturing industry.

5. Performance of unrelated merger in large service industries is higher than post

merger performance of related mergers in large service industries.

6. Finally, mergers that occurred with in 2 years after the market crashed in UK had

the lowest post merger performance than the early 1980s and 1990s.

Keywords: Mergers and Acquisitions, Related & Unrelated mergers, Total Factor

Productivity (TFP), Labor productivity

Item Type: Dissertation (University of Nottingham only)
Keywords: Mergers and Acquisitions, Related & Unrelated mergers, Total Factor Productivity (TFP), Labor productivity
Depositing User: EP, Services
Date Deposited: 09 Nov 2006
Last Modified: 20 Sep 2016 14:50
URI: http://eprints.nottingham.ac.uk/id/eprint/20484

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