Performance of M&A Deals in The Russian Market: Evidence from Oil & Gas and Power Industries
Abstract
The paper provides a comprehensive investigation of M&A deals on the Russian market, particularly in the Oil and Gas and Power sectors. This research fills the gap in literature by scrutinizing key M&A trends, reviewing M&A activities, and evaluating M&A performance through a combined application of Data Envelopment Analysis (DEA) and case study analysis. A critical part of this study involves exploring the influence of geopolitical factors on these transactions. The article presents a novel academic contribution by offering focused insights on M&A activities in two under-researched yet critical sectors of the Russian economy. Furthermore, the innovative use of DEA and case study analysis enhances our understanding of industry trends over a span of 22 years, including the M&A transactions of 2022. Our sample includes 23 deals made by 17 Russian companies in the Energy and Power industries. We selected deals as a result of which the acquirer companies obtained more than 50% of the target company, so the acquirer company gained control over the operations and performance of the acquired company. The study traces the effects of geopolitical influences on M&A outcomes, a critical consideration given Russia’s unique geopolitical context. This research is of practical significance for domestic and international businesses contemplating M&A decisions within Russia’s Oil & Gas and Power industries, offering valuable insights to guide future strategies. While this study uncovers promising positive trends, further exploration and long-term data are necessary for a complete assessment of the impact of these M&A activities on company performance.
Downloads
References
Radygin A. Russia’s Market of Mergers and Acquisitions: Stages, Features and Prospects. Voprosy Ekonomiki. 2009;(10):23-45. (In Russ.) https://doi.org/10.32609/0042-8736-2009-10-23-45 DOI: https://doi.org/10.32609/0042-8736-2009-10-23-45
Kinateder H., Fabich M., Wagner N. Domestic mergers and acquisitions in BRICS countries: Acquirers and targets. SSRN Electronic Journal. 2017:2896703. https://doi.org/10.2139/ssrn.2896703 DOI: https://doi.org/10.2139/ssrn.2896703
Yaghoubi R., Yaghoubi M., Locke S., et al. Mergers and acquisitions: a review. Part 1. Studies in Economics and Finance. 2016;33(1):147-188. https://doi.org/10.1108/SEF-03-2015-0078 DOI: https://doi.org/10.1108/SEF-03-2015-0078
Bhagat S., Malhotra S., Zhu P.C. Emerging country cross-border acquisitions: Characteristics, acquirer returns and cross-sectional determinants. SSRN Electronic Journal. 2011:1813202. https://doi.org/10.2139/ssrn.1813202 DOI: https://doi.org/10.2139/ssrn.1813202
Aybar B., Thanakijsombat T. Financing decisions and gains from cross-border acquisitions by emerging-market acquirers. Emerging Markets Review. 2015;24:69-80. https://doi.org/10.1016/j.ememar.2015.05.008 DOI: https://doi.org/10.1016/j.ememar.2015.05.008
Bertrand O., Betschinger M.-A. Performance of domestic and cross-border acquisitions: Empirical evidence from Russian acquirers. Journal of Comparative Economics. 2011;40(3):413–437. https://doi.org/10.1016/j.jce.2011.11.003 DOI: https://doi.org/10.1016/j.jce.2011.11.003
Chirkova E., Chuvstvina E. Market reaction to the announcement of the acquisition of public and private companies. Journal of Corporate Finance Research. 2012;5(3):30–43. (In Russ.) https://doi.org/10.17323/j.jcfr.2073-0438.5.3.2011.30-43 DOI: https://doi.org/10.17323/j.jcfr.2073-0438.5.3.2011.30-43
Grigorieva S., Kolmykova T. Impact of Stock Payment on M&A Performance in High Information Asymmetry. Vestnik Moskovskogo universiteta. Seriya 6. Ekonomika. = Moscow University Economics Bulletin 2020;(3):58-77. (In Russ.) DOI: https://doi.org/10.38050/01300105202033
Dell’Acqua A., Etro L., Piva M., et al. Investor protection and value creation in cross-border m&as by emerging economies. Journal of International Financial Management & Accounting. 2017;29(1):83–100. https://doi.org/10.1111/jifm.12069 DOI: https://doi.org/10.1111/jifm.12069
Rodionov I.I., Mikhalchuk V.B. M&A Synergies in Domestic M&A Deals in Russia in 2006–2014. Rossiiskii zhurnal menedzhmenta = Russian Journal of Management. 2016;14(2):3–28. (In Russ.) https://doi.org/10.21638/11701/spbu18.2016.201 DOI: https://doi.org/10.21638/11701/spbu18.2016.201
Rogova E., Lusina D. The effect of mergers and acquisitions on companies’ fundamental values in emerging capital markets (the case of BRICS). Journal of Corporate Finance Research. 2015;9(3):27–50. (In Russ.) https://doi.org/10.17323/j.jcfr.2073-0438.9.3.2015.27-50 DOI: https://doi.org/10.17323/j.jcfr.2073-0438.9.3.2015.27-50
Hsu P.-H., Huang P., Humphery-Jenner M., et al. Cross-border mergers and acquisitions for innovation. Journal of International Money and Finance. Elsevier. 2021;112(C):102320. https://doi.org/10.1016/j.jimonfin.2020.102320 DOI: https://doi.org/10.1016/j.jimonfin.2020.102320
Nepomuceno T. Data envelopment analysis (DEA). Scholarly Community Encyclopedia. 2022.URL: https://encyclopedia.pub/entry/7783 (accessed on 16.07.2023)
Ochirovа Е., Dranev Yu. The Impact of R&D Expenditure upon the Efficiency of M&A Deals with Hi-Tech Companies. Foresight and STI Governance. 2021;15(1):31–38. https://doi.org/10.17323/2500-2597.2021.1.31.38 DOI: https://doi.org/10.17323/2500-2597.2021.1.31.38
Bai X., Zeng J., Chiu Y.-H. Pre-evaluating efficiency gains from potential mergers and acquisitions based on the resampling DEA approach: Evidence from China's railway sector. Transport Policy, Elsevier. 2019;76:46-56. https://doi.org/10.1016/j.tranpol.2019.01.012 DOI: https://doi.org/10.1016/j.tranpol.2019.01.012
Walter M., Cullmann A. Potential Gains from Mergers in Local Public Transport: An Efficiency Analysis Applied to Germany. Discussion Papers of DIW Berlin. 2018;832. https://doi.org/10.2139/ssrn.1426091 DOI: https://doi.org/10.2139/ssrn.1426091
Wankea P., Maredza A., Gupta R. Merger and acquisitions in South African banking: A network DEA model. Research in International Business and Finance. 2017;(41):362-376. https://doi.org/10.1016/j.ribaf.2017.04.055 DOI: https://doi.org/10.1016/j.ribaf.2017.04.055
Chang T.-S., Lin J.-G., Ouenniche J. DEA-based Nash bargaining approach to merger target selection. European Journal of Operational Research. 2023;305(2):930-945. https://doi.org/10.1016/j.ejor.2022.06.017 DOI: https://doi.org/10.1016/j.ejor.2022.06.017
Rahman M., Lambkin M. Creating or destroying value through mergers and acquisitions: A marketing perspective. Industrial Marketing Management. 2015;46:24-35. https://doi.org/10.1016/j.indmarman.2015.01.003 DOI: https://doi.org/10.1016/j.indmarman.2015.01.003
Vinocur E., Kiymaz H., Loughry M.L. M&A capability and long-term firm performance: a strategic management perspective. Journal of Strategy and Management. 2023;16(2):211-234. https://doi.org/10.1108/JSMA-10-2021-0204 DOI: https://doi.org/10.1108/JSMA-10-2021-0204
Pervan M., Višić J., Barnjak K. The Impact of M&A on Company Performance: Evidence from Croatia. Procedia Economics and Finance. 2015;23:1451-1456. https://doi.org/10.1016/S2212-5671(15)00351-2 DOI: https://doi.org/10.1016/S2212-5671(15)00351-2
Deloitte (2017) M&A Making the deal work // Website deloitte.com. (https://www2.deloitte.com/content/dam/Deloitte/us/Documents/mergers-acqisitions/us-ma-making-the-deal-work-strategy.pdf)
Coelli T., Prasada Rao D., O’Donnel C., et al. An introduction to efficiency and productivity analysis. N.Y.: Springer Science + Business Media; 2005. 341 p.
Stobierski T. 13 Financial Performance Measures Managers Should Monitor. 2020. URL: https://online.hbs.edu/blog/post/financial-performance-measures (accessed on 16.07.2023)
Murphy A., Tucker H., eds. The Global 2000. URL: https://www.forbes.com/lists/global2000/?sh=3c76bc6c5ac0 (accessed on 16.07.2023)
Copyright (c) 2023 National Research University Higher School of Economics

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