Does M&A create value?

Abstract

The conventional wisdom that most of M&A transactions destroy value perhaps has become obsolete. This investigation tries to analyze weather success rate in M&A have risen or not. The consensus derived from a series of studies focused on M&A transactions that were developed during the 90s may say no. Through different quantitative approaches, these analyses have established the failure rate between 70% and 90%. However, although it is known that most of the transactions destroyed value in the past, corporate and investment funds have conducted transactions with better results between the 2000-2007 period, being 2007 the year in which all records were broken, before the economic crisis. The aim of the thesis is to objectively analize a data sample of M&A transactions and conclude weather M&A creates value or not. Of course, after the analysis it is not going to be possible to make conclusions generally, as the study only focuses on a specific data sample, but it may develop which are some factors that affect the M&A value creation. In order to develop the whole analysis, value creation is going to be measured through already developed metrics, so no value creation measures are going to be created. In fact, the final part of the revision of the existing literature is going to be based on the explanation of the different measures that have been used during history to measure value creation. Then, the method which suits better to the study is going to be used and final conclusions are being presented at the very final part of the thesis.