The post-merger accounting performance of greek listed firms in south-eastern european countries

Abstract

This study examines the international mergers and acquisitions (M&As) of Greek firms in South-Eastern European countries. The main objective of this paper is to evaluate the post-merger performance of Greek listed firms in the Athens Stock Exchange that executed as acquirers one merger or acquisition in a five-year-period (from 1998 to 2002). For the purpose of the study, a set of twenty ratios is employed, in order to measure firms’ post-merger performance and to compare pre- and post-merger accounting data for three years before and after the M&As events. The selected countries of South-Eastern Europe for the research sample are the three countries with the larger Greek investments in that period: Romania, Bulgaria and Albania. The results revealed that the international M&As activities of the Greek listed sample firms in the selected countries of this research have not lead them to enhanced post-merger performance, but, in general, to an accounting performance deterioration that also have a negative impact on three profitability examined ratios. Also, the most interesting that is revealed is that the worsening of the two years after the M&As is greater in the next period (three years after the examined event) and there is no negative or positive ratio significant change in the first year after the international M&As. Last, the study further analyses these ratio results with the method of payment of the acquiring firms: cash and stock exchange (with minor cash amounts); the conclusion for this is that the method of payment has no impact on the post-merger accounting performance of the examined firms.