<abstract xmlns="http://www.w3.org/1999/xhtml"><p> This paper presents the research results in the field of the efficiency of mergers and acquisitions in the mechanical engineering industry of the Czech Republic. The aim of this paper is to determine whether mergers taking place in mechanical engineering are successful, or possibly to identify factors which may be deemed as synergies sources. In our research, the success rate of mergers is identified on the basis of the increasing revenues and operating profit. It has been established that out of mergers completed in 2004 - 2011, success has been achieved in approximately half of them. For this reason, we have focused on identifying the factors which may serve as the reasons for such a difference. The selected indicators of the cost-to-revenue ratio and utilization of fixed assets, investments, and net working capital we analysed before and after the mergers in both groups of successful and unsuccessful mergers. The Mann-Whitney U test was used to test the results. The research results have demonstrated that synergies are not achieved due to the change in the market power of the merged companied but owing to operational efficiency which is reflected in a drop in labour costs and depreciation to revenues ratios and increasing asset utilization.</p></abstract>

This paper presents the research results in the field of the efficiency of mergers and acquisitions in the mechanical engineering industry of the Czech Republic. The aim of this paper is to determine whether mergers taking place in mechanical engineering are successful, or possibly to identify factors which may be deemed as synergies sources. In our research, the success rate of mergers is identified on the basis of the increasing revenues and operating profit. It has been established that out of mergers completed in 2004 - 2011, success has been achieved in approximately half of them. For this reason, we have focused on identifying the factors which may serve as the reasons for such a difference. The selected indicators of the cost-to-revenue ratio and utilization of fixed assets, investments, and net working capital we analysed before and after the mergers in both groups of successful and unsuccessful mergers. The Mann-Whitney U test was used to test the results. The research results have demonstrated that synergies are not achieved due to the change in the market power of the merged companied but owing to operational efficiency which is reflected in a drop in labour costs and depreciation to revenues ratios and increasing asset utilization.

Efficiency of Mergers of Mechanical Engineering Companies in the Czech Republic

Brno University of Technology, Faculty of Business and Management, Institute of Finances, Kolejní 2906/4,612 00 Brno,

Review of Economic Perspectives

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Efficiency of Mergers of Mechanical Engineering Companies in the Czech Republic"}

This paper presents the research results in the field of the efficiency of mergers and acquisitions in the mechanical engineering industry of the Czech...

Efficiency of Mergers of Mechanical Engineering Companies in the Czech Republic

Published Online: Dec 17, 2016

Page range: 361 - 374

Received: Sep 30, 2016

Accepted: Nov 08, 2016

DOI: https://doi.org/10.1515/revecp-2016-0020

Keywords
Cost efficiency, Investment in fixed assets and net working capital, Mann- Whitney U test, Mergers in mechanical engineering, Operating synergies

© by Jan Pěta

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Efficiency of Mergers of Mechanical Engineering Companies in the Czech Republic

Published Online: Dec 17, 2016

Page range: 361 - 374

Received: Sep 30, 2016

Accepted: Nov 08, 2016

DOI: https://doi.org/10.1515/revecp-2016-0020

KeywordsCost efficiency, Investment in fixed assets and net working capital, Mann- Whitney U test, Mergers in mechanical engineering, Operating synergies

© by Jan Pěta

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
Cost efficiency, Investment in fixed assets and net working capital, Mann- Whitney U test, Mergers in mechanical engineering, Operating synergies