Acquisitions and mergers are often used to structure companies. These are operations of an economic and legal nature designed to unite several organizations into a single corporate structure. The owners of the new business unit are those who have a controlling stake. The purpose of the event is to improve capital efficiency.

What are the main pros and cons?

In an effort to improve their financial results, enterprises are making attempts to unite. Joint management significantly increases the efficiency of organizations. Mergers and acquisitions in Russia, as practice shows, provide an opportunity to adapt to a progressive economic system and gain additional privileges in competition.

The advantages of the merger are obvious:

• reducing the time required to achieve a positive effect;
• optimization of the tax base;
• geographic expansion of business;
• gaining control over tangible intangible assets;
• acquisition working capital directly at the previously reduced cost;
• instant purchase of a specific market sector.

There are also some disadvantages:

• quite large costs related to payment of penalties;
• significant difficulties when there are companies in different industries;
• possible difficulties when interacting with new employees;
• in reality, the deal may not be very profitable.

Features of ongoing processes

The ongoing acquisitions and mergers have their own specifics. In case of a voluntary merger of companies, a new legal entity must be formed. If one enterprise joins another, then the main one retains its essence as a subject. All rights and obligations of subsidiaries are transferred to it.

Merger is the process of combining two or more legal entities on a voluntary basis. After all the documents have been completed, the new one begins to function. The combination can take place according to two scenarios.

1. Restructuring of companies is carried out with complete liquidation. The resulting enterprise acquires the assets and liabilities of the incorporated entities.
2. When merging, the rights of existing entities are partially transferred as investment contributions. In this case, the participants retain administrative and economic integrity.

A company takeover refers to the process in which one company buys out another. After registration, she begins to fully control its activities. In this case, the dominant company acquires at least 30 percent of the authorized capital of the second legal entity.

Classification of merging procedures

Conducted mergers and acquisitions can be divided according to various principles. The type of association is selected depending on the conditions established in the market environment, as well as on the potential opportunities that business companies have.

The table shows the main types of joins.

Also, mergers and acquisitions are classified according to national and cultural characteristics. If the organizations being restructured are located on the territory of one state, then they are considered national. Their activities do not go beyond the boundaries within which they conduct them. Transnational is an association of entities from different countries. Their number can be unlimited. Multinational corporations are common these days.

Fundamental points of positive effect

In order for acquisitions and mergers to be positive, it is necessary to take into account some factors:

• determining the optimal form of association;
• speed of connecting middle and senior staff to the process;
• the amount of expected capital for integration;
• procedure for conducting a transaction;
• selection of the main representative for future relations.

During the operation, it is necessary to understand from the very beginning that obtaining a positive result when combining organizations should lead to increased profits. At the entire stage of restructuring, mistakes made should be corrected in a timely manner. The ultimate goal is not only to have a synergistic effect, but to maintain it for a long time.

Preparing for the M&A Process

At the initial stage, the main tasks are set and ways to solve them are determined. It is necessary to understand whether the goals set can be achieved by alternative methods. To do this, it is necessary to carry out procedures to increase internal potential, develop suitable marketing strategies and other measures that can bring you closer to the planned result.

After this, a search for a suitable company to merge is carried out. Preparation directly for the transaction takes place in three stages.

1. The field of activity of the enterprise is studied: growth dynamics, possible distribution of potential, impact external factors. The first step is to look at actual assets and liabilities.
2. Own capabilities are analyzed. In any case, the company must make an unbiased self-assessment. Using the data obtained, you can understand what criteria should be used when choosing an organization.
3. Possible competitors are being investigated. You can feel all the positive aspects of the merger if you carefully study the potential of your rivals. By assessing them, it is easier to determine the strategic direction.

Analysis of the effectiveness of the completed transaction

There is an opinion that a merger of companies will be a great success if a company from a market sector that is progressively developing is chosen as an opponent. However, this approach is not correct. The final assessment of mergers and acquisitions is made based on various studies:

• analysis of the balance of incoming and outgoing transactions;
• determining the benefits of integration for all parties;
• taking into account the specifics of the association;
• identifying the main problems in the field of tax base, personnel and legal restrictions.

Possible negative points

Conversions from economic structures can have not only positive but also negative effects. The studies conducted show completely different results. Analysts came to the conclusion that negative aspects arise for a number of reasons related to each other:

• erroneous assessment of the capabilities of the acquired company;
• misuse of financial resources necessary for integration;
• illiterate steps at the combination stage.

Application in practice

During a period of economic instability in a state, the best way out of the situation is to create an alliance. Such measures will help reduce the cost of assets and unite efforts to survive during the crisis. There are a lot of examples of mergers and acquisitions, but the option with the American company LHC Group deserves special attention.

The presented organization managed to double its value within six months. And this is in a financial crisis. The use of an outsourcing scheme made it possible to increase the structure by 8 in just six months economic units. The financial benefits won made it possible to significantly expand the scope of services. The company managed to find opportunities for progressive development by investing funds, despite negative external factors.

As a conclusion

On Russian market mergers and acquisitions, the total amount of transactions decreased by an average of 29 percent. This is due to a decrease in the volume of operations performed. The Russian Federation's share in the world market was approximately 1.3 percent. Over the past ten years, such low rates have not been observed. As for foreign investment, its volume increased by 40 percent.

In the distant 90s of the last century, there was a change in the course of many companies. The concepts of flexibility and agility have faded into the background, and these established principles have been replaced by new ones: expansion and growth. Absolutely all large companies sought to find an additional source of expansion of their activities. It was during this critical period that the concept of “acquisition and merger of companies” appeared.

Today, merger of companies is a leading technique successful development own business. Almost everything successful companies it is still used today. And how exactly this process occurs, we will consider below.

What do the terms “merger” and “acquisition” mean?

Quite often the concept of “merger” is confused with the concept of “acquisition”. In fact, these are completely different concepts, as well as their true meaning. This happens for the reason that it is enough a large number of corporations do not always voice their true intentions in relation to the object of interest to them.

Absorption

This concept refers to the takeover of a smaller company by a large company. When this process occurs, a small organization that was swallowed up by a business shark ceases to exist legally. After this process, it becomes an integral part of one large corporation. But at the same time, the functions of such an organization are preserved. In other words, the scope of activity does not change, only the name can be changed.

To date, there are several of the most striking examples of takeovers. Financing of mergers and acquisitions is carried out by the participants or the state when it is interested in this. The well-known Google at one time absorbed several smaller companies, such as Begun, AOL, YouTube. It is worth noting that this is only a small part of the companies that have become the property of Google, but as a clear example this is more than enough.

But, as described above, quite often shark corporations do not want to clearly demonstrate their takeover small firms and can create the so-called appearance of an equal merger. In this case, a merger occurs.

Merger of companies

This concept denotes a general association of companies with equal rights for each. And in this case, it does not matter how large and equal in turnover the companies that have come together to work together are. It is worth noting that real unification in practice occurs in very rare cases.

Features of mergers and acquisitions

Mergers and acquisitions of companies have their own characteristics that differ from each other.

During a merger, there is always one dominant company, which initiates the process. Such a corporation has large capital and the necessary capacities. At the same time, if smaller organizations that decided to merge have shareholders, then they are included in the new composition, retaining their shares and rights. In this case, only the name of their company changes for them, and the amount of dividends received remains at the same level.

In a takeover, a corporation that acquires smaller organizations acts as follows. The acquirer buys all the shares of the company from the shareholders who created the enterprise. In other words, people who owned the main share of capital in the acquired organization, after selling their shares, lose all rights after the completion of the takeover procedure.

Reasons why acquisitions and mergers occur

The point of acquisitions and mergers is to obtain the maximum amount of all benefits from mutual cooperation. In an example it looks like this. Two organizations combine their efforts and create one, while they optimize personnel, reduce the number of employees, and due to this first step, tangible savings occur in material resources.

The next step is to increase productivity. In other words, when mergers and acquisitions of enterprises occur, the output obtained at the same costs is two or even three times greater. As a result, the benefits from mutual cooperation are obvious.

An increase in the sales market is another huge benefit that both companies receive, since the so-called coverage area increases by an order of magnitude. And the last advantage from joint cooperation is the improvement of credit conditions that the owners of the merged organization can receive.

It is worth noting that there is a practice of acquiring a company only due to its wide customer base. Always, at any time and under any market conditions, the most valuable thing a company engaged in production and sales has is its customer base. But the thing is that, no matter how good the products an enterprise produces, without a sales market, it is nothing worthwhile company in terms of turnover.

Therefore, almost always the true reason why acquisitions and mergers are carried out is the struggle for the market and the possible chance of eliminating a competitor.

But it is not always possible to get only bonuses from a merger. Quite often, conflicts occur in new companies, which leads to the collapse and destruction of the common idea. Therefore, most often before a merger of companies, the parties sign a so-called memorandum.

Financial side when merging companies

As a rule, a merger of companies occurs in two ways, namely:

• purchase of capital;
• share repurchase.

When purchasing capital, the following happens. One company receives, in exchange for material resources, the full right to own another company. If the buyer purchased only part of the assets from the seller, in such a transaction the part that the buyer does not own is immediately allocated. This is how acquisitions and mergers occur, and the need arises to determine management measures in relation to the seller.

U this method Partial acquisition of a company has another side to the coin. In most cases, even if the purchase of a company has occurred only partially, shareholders cannot always influence the further course of development of the company. This is due to the fact that such conditions may initially be prescribed for a partial purchase of an organization. And as a rule, owning shares does not imply the ability to change or make any decisions. The only thing stocks provide is dividends.

What does the term "vertical and horizontal type of merger" mean?

The term "vertical" is used to describe a specific process that occurs when companies merge. In other words, the enterprise that initiated the acquisition and merger can build a complete production chain through this procedure. Such a chain will include absolutely the entire technological and commercial process. From receiving raw materials, manufacturing products to selling them to the end consumer.

Metallurgical, mining and engineering organizations can serve as a good example.

The term “horizontal” is used when merging enterprises that have a similar field of activity. In other words, complete coincidence of the entire work cycle.

What methods and formats of the process exist?

Mergers and acquisitions of companies always take place in two main directions, namely:

• Corporation. This type of merger is characterized by the unification of absolutely all active organizations that were involved in this transaction to work synchronously and obtain common mutual benefits.
• Corporate alliances. Such a merger or acquisition occurs for one purpose and under one condition: the activities of absolutely all participants must be deployed within one specific area of ​​business. If there are other production areas, then the dominant company develops them independently. At the same time, this type of business is always separated into a separate structure, which has no relation to the corporate alliance, or rather to the main activity.

Merge Format

The mergers and acquisitions market is broad. According to the classics, the merger format is 50*50. But in fact, the experience of many organizations indicates that achieving such a merger model is almost impossible. The format refers to the identity of the merge. Because it can be both national and transnational.

• National merger. A group of companies located in the same country decides on joint cooperation.
• Transnational merger. A corporation decides and makes an offer to another, smaller organization for a merger or acquisition. At the same time, a smaller enterprise is located on the territory of another country.

Moreover, there may be several enterprises in which a large corporation is interested, and they may be located in different countries.

The most striking examples

Acquisitions and mergers with impressive final results are not uncommon. More on them later. The idea of ​​a takeover is to increase its competitive ability in the sales market. But for the sake of truth it is worth emphasizing that world practice is full of cases of complete failure after a perfect merger. Such incidents happened not only to ordinary enterprises, but also to fairly large market players.

If we consider the largest and most successful acquisitions, we can take as an example the AT&T division acquired by Comcast Corporation. This step helped this corporation become a leader in the cable television market in the United States. It is worth noting that the steps that were required to conquer the market Olympus cost this corporation a very large amount. But the takeover strategy, despite the high costs, yielded stunning results.

In this case, the corporation’s thoughtful actions immediately led to three big advantages, namely:

• the main competitor was neutralized;
• the quality of the service provided has increased;
• The cable network coverage area has expanded.

It was wise decisions and the ability to work as a team that were able to produce such a tangible result in the end.

Sometimes international mergers and acquisitions fail. A good example That's why AOL is the company. This corporation merged with another corporation - Time Warner Cable. The cost of such a transaction was fabulous, but it did not bring the expected result. At the very beginning, such a deal promised great prospects for the future, but as a result, both companies lost their positions as leaders in a specific market.

The main problem turned out to be quite banal and unforgivable in the case of these leaders. The AOL corporation described such a failure as an overly expensive merger procedure.

This is just a small assessment of mergers and acquisitions that have had a positive or negative outcome. It is important to understand that such transactions are quite costly procedures, and it is not a fact that after the operation there will be long-awaited dividends.

How do mergers and acquisitions happen in Russia?

In our country, and in the CIS countries, processes such as mergers and acquisitions take place in a slightly different form. It is worth noting that the Western market is a noticeable leader in this area. The problem is that all the merge processes Russian companies have a political connotation. But at the same time, the most common form in which mergers and acquisitions take place in Russia is integral.

This form has become widespread partly due to the crisis. Vertical alliances solve a critical problem such as accounts receivable. An important aspect is that with the help of such transactions it is possible to solve production tasks. Unfortunately, most of these transactions take place only within the interests of the authorities.

Features of mergers in Russia: what such transactions look like

The peak of transactions of this kind occurred in 2003. At the time, the total reached $23 billion. But just a year later, such activity dropped significantly.

In our country, the merger and acquisition strategy is usually as follows: in most cases, the main player is always the government. This is due to the fact that the greatest interest is generated by enterprises operating in the oil and gas industry. And if we are talking about a foreign enterprise, then such corporations in most cases are only interested in gas and oil. And only a few foreign investors are interested in the agricultural and food sectors.

As for the question of what such mergers and acquisitions look like in our homeland, let's say this. An example of such transactions looks like this: You should also understand how mergers and acquisitions are financed.

LLC "UMMC-Holding" is a company that was able to lead to the merger of over ten processing enterprises that are involved in the ferrous and non-ferrous industry. Today, the direct influence of UMMC extends to 22 organizations located in seven cities of our homeland. Moreover, UMMC also absorbed the existing Litaskabelis plant, which is located in Lithuania.

The main goal that was pursued in making all these transactions was to increase the company’s share in a specific market. Thanks to the integration, the domestic corporation not only created additional capacity and was able to reduce by an order of magnitude investment risks. UMMC turned out to be a strong and firmly standing monster for only one reason: the corporation acquired only those enterprises whose work was tested by the real market.

Conclusion

The modern economy is precisely the engine thanks to which mergers and acquisitions of enterprises are put into operation. These processes have a high chance and prospects in the future. But at the same time, such forms of business also have certain risks associated with high hopes and investments. World history economy has a large number of unsuccessful transactions that led to largest corporations before bankruptcy. But as they say, those who don't take risks don't drink champagne, and this proverb accurately reflects everything that happens in the mergers and acquisitions market.

Federal State Educational Institution of Higher Professional Education

Financial University under the Government of the Russian Federation

International Faculty of Economics

Department " World economy and international business"

Final qualifying work

Mergers and acquisitions of companies: global and Russian practice

Completed by Grinin M.V.

student of group E4-1

Scientific director

Ph.D., Professor Medvedeva M.B.

Moscow 2013

Introduction

CHAPTER 1. Theoretical aspects of mergers and acquisitions

1.1 Features of mergers and acquisitions in the context of globalization of the world economy

2 Impact of the global financial crisis on the mergers and acquisitions market

CHAPTER 2. Global experience in mergers and acquisitions

2.1 Organizational aspects of the transaction and the financial analysis its investment component

2 Financial instruments of mergers and acquisitions. The role of investment banks in this process

3 Russian practice of mergers and acquisitions: problems and prospects

Conclusion

List of used literature

INTRODUCTION

The development of the world economy and globalization processes lead to companies merging in order to strengthen their position in the market. Such processes are called merging. However, there is another option for the development of such a process, when a larger and stronger company “absorbs” a smaller and weaker one in order to minimize the number of competitors in the market and strengthen its position. These processes have become common in the modern world economy.

M&A transactions have a global impact on the global economy and on the economy of individual countries. With consolidation, a business becomes more powerful and less subject to control and regulation by national governments, and also by international economic organizations. Trends in M&A transactions are rapidly spreading in the Russian market. At the same time, Russian companies take part in international transactions as acquired companies, and also act as buyers.

Relevance high school graduation qualifying work due to the need to study the world market and one of its components - the Russian market - to study mergers and acquisitions in order to identify trends and patterns, as in the periods economic growth, and during periods of crisis. The resulting observations enable business leaders and governments to make strategic decisions for effective asset management.

Target final qualifying work - the study of mergers and acquisitions on a global and national scale.

Tasks final qualifying work:

Analysis of the mergers and acquisitions market in the context of globalization and during periods of crisis;

Consideration of organizational aspects of M&A transactions and their financial component. Determining the problems and prospects of the mergers and acquisitions market in Russian conditions.

Object research is the global and national market for mergers and acquisitions.

Subject The research focuses on the processes of mergers and acquisitions of companies.

The first chapter examines trends in mergers and acquisitions in the context of globalization of the world economy and during periods of influence of the global financial crisis, the characteristic features of M&A transactions during these periods, as well as the ratio of the number of mergers and acquisitions completed in the financial and real sectors of the economy.

The second chapter examines organizational aspects, financial instruments and the investment component of mergers and acquisitions, and identifies problems and prospects for M&A processes in Russian practice.

The methodological basis of the thesis was the works of Russian and foreign scientists: P.D. Sychev, P.A. Astakhov, S.F. Reed, A.R. Lazhu, A.V. Chaussky, D.A. Endovitsky, V.E. Soboleva, I.A. Babenko, V.F. Badyukov, I.N. Zhuk, A.V. Pushkin, K. A. Grishin, A. A. Begaeva, E. M. Rogova, E.A. Tkachenko, E.A. Fiyaksel, N.G. Sinyavsky.

Chapter 1. Theoretical aspects mergers and acquisitions

.1 Features of mergers and acquisitions in the context of globalization of the world economy

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One of the most important patterns of development market economy is increasing business consolidation. Such consolidation occurs both at the micro level - at the corporate level, and at the macro level, incl. at the level of the national economy and the world economy as a whole.

Consolidation entrepreneurial activity(business) can be carried out in various ways. Currently, the decisive method is mergers and acquisitions. A large literature is devoted to issues related to the analysis of the mergers and acquisitions system, incl. foreign and domestic. But insufficiently explored questions remain. “Insufficiency” is largely due to the fact that the system of mergers and acquisitions is a very complex, multifaceted economic category. In addition, significant changes occur in this system under the influence of various factors.

Therefore, it is necessary and advisable to study the features of mergers and acquisitions at various stages of development of a market economy.

Mergers and acquisitions have a relatively long history. As one of the ways to concentrate production and capital, they can be traced back to the formation of a capitalist market economy. But only relatively recently (since the 1960s) mergers and acquisitions (as a similar method) have acquired a significant role. An indirect confirmation can be the establishment of a specialized magazine in the USA “Mergers and Acquisitions” in 1965. And since the 1980s, mergers and acquisitions have acquired the character of a constantly functioning system of connections between economic entities. It was during these years that solid research on this problem appeared.

The system of mergers and acquisitions includes two main directions: intranational and international, or cross-border. Both of these directions have one common characteristic feature - in both of them stages are clearly visible, each of which has its own characteristics. In the western economic literature These stages are called “waves” of M&A.

Summarizing the research on the stages of development of the global mergers and acquisitions market, this paper examines the most important features of all periods.

The first period, from 1893 to 1904, was characterized by a significant number of horizontal merger transactions. Second period from 1919 to 1929 was marked by a significant increase in processes vertical integration. Third period from 1955 to 1969/73. became the era of conglomerate takeovers. The fourth wave from 1974/80 to 1989. highlighted by a high proportion of hostile takeovers. The main difference between the fifth wave from 1993 to 2000. mega-deals have become international in scope.

A number of researchers and economists are of the opinion that 2003 marked the beginning of a new stage of its development for the global mergers and acquisitions market, which can be called the sixth wave of mergers. During the recovery period from the economic and financial downturn that began in 2000, a new wave of mergers occurred in 2003. The new wave has surpassed all previous waves in scale and quantity: the volume of the global mergers and acquisitions market has grown more than 3 times in 5 years (from $1.2 trillion in 2002 to $4 trillion by the end of 2007). In addition to quantitative changes, during the analysis, I also identified other special features of the sixth “pre-crisis” stage of mergers and acquisitions of 2003-2007:

· significant revival of private investment funds as participants in M&A transactions.

· transborder.

· the main type of transaction financing during the sixth wave was cash financing, which displaced financing using valuable papers and to the background.

The general, objective basis of the “wave-like” process of mergers and acquisitions is the cyclical nature of the development of a market economy, which acts as one of its main laws. It is the different stages and phases of the economic cycle that determine the differentiation of stages and waves of mergers and acquisitions.

The “undulating” nature of the mergers and acquisitions process is manifested in the fact that it has its own “ebbs,” “ebbs,” and high and low points.

The modern post-crisis wave of mergers and acquisitions begins in 2010. Subject this study are cross-border mergers and acquisitions. This category of mergers and acquisitions has been noticeably visible since the 1980s.

It was from this time that statistical data on cross-border mergers and acquisitions of various international institutions appeared. One such institution is the United Nations Conference on Trade and Development (UNCTAD). This organization studies the processes of cross-border mergers and acquisitions and since 1987 begins to regularly publish statistical data.

The question arises: why, since the late 1980s, have cross-border mergers and acquisitions become the object of statistical analysis by relevant international institutions? The answer should be sought in changing the strategy of foreign direct investment of the main entities (international companies) carrying out foreign direct investment. Since the second half of the 1980s, international companies (primarily TNCs) have been actively using cross-border mergers and acquisitions as the main, key way of making foreign direct investments in comparison with the strategy of initial, new direct investment projects (greenfield FDI projects). Moreover, the gap between these methods (strategies) of foreign direct investment is constantly growing.

What explains such a significant increase in the role of cross-border mergers and acquisitions in the international direct investment system? UNCTAD experts highlight two main reasons or advantages of cross-border mergers and acquisitions compared to initial, new direct investments. This means speed and greater access to property assets. A special role belongs to speed, or reduction of time for inclusion in investment and business activities of foreign companies in recipient countries.

The analysis allows us to identify the main factors that determine the features of cross-border mergers and acquisitions in modern conditions.

Firstly, the growth in the number of transnational corporations and especially the increase in their economic and financial power. Suffice it to say that the assets of only foreign divisions of TNCs increased over the period from 1982 to 2011 almost 29 times - up to 65.3 trillion. Doll.

Secondly, increased competition in national and global foreign direct investment markets and mergers and acquisitions markets.

Thirdly, the formation and expansion of regional integration groupings.

The noted factors predetermine the features of cross-border mergers and acquisitions in modern conditions.

The current stage of such mergers and acquisitions is a global process. Almost all countries of the world community are participating in this process. In 1991-2000 UNCTAD experts named 116 countries as participants in the global cross-border mergers and acquisitions market, and in 2004-2011 163countries countries. At the same time, the role of developing countries and countries in transition in this process is noticeably increasing. The global nature of cross-border mergers and acquisitions, in turn, is accompanied by an increasing trend in the number and value of transactions in these markets. In this regard, as Western researchers note, “we need to prepare for the fact that as the number of international mergers increases, transactions will become more complex, since cross-cultural, financial and currency differences come into play.”

One of the most important characteristic features modern stage cross-border mergers and acquisitions lies in the trend towards an increase in the number and value of the largest transactions. Such transactions include the so-called mega-deals, the value of which exceeds $1 billion. So, if for the period 1987-1996. the total number of such transactions was 229 (or 0.91% of all cross-border mergers and acquisitions), and the total volume of their value was $490.5 billion (36.7%), then for the period from 1997 to 2011. - 4573.2 billion dollars. Such a rapid increase in the number and value of the largest cross-border mergers and acquisitions is due to two main reasons. Firstly, such transactions are carried out by the largest international companies with enormous financial resources; secondly, such transactions are serviced (organized, advised, financed) by large institutional investors - various categories of banks, investment funds (trust, pension, pension, etc.). Often institutional investors themselves act as direct participants in mergers and acquisitions. In particular, in 2007, some collective investment funds carried out 962 transactions in the cross-border mergers and acquisitions market amounting to 194.6 billion. dollars. It is thanks to the relatively greater activity in different periods of these institutions that it is possible major transactions in certain years.

There is intense competition in the market for cross-border mergers and acquisitions of stock exchanges. At the beginning of 2006, the American stock operator Nasdaq Stock Market Inc. became the largest shareholder of the London Stock Exchange, purchasing 15% of its shares for $780 million. In the context of the development of regional integration processes, cross-border mergers and acquisitions of transport companies are expanding.

There are intense cross-border mergers and acquisitions in the real estate market. Moreover, the cost of such transactions increases significantly. Therefore, players in these markets are forced to seek financial assistance from institutional investors, incl. emerging real estate funds and pension funds.

Taking into account the industry focus, there are three main types of cross-border mergers and acquisitions: horizontal, vertical, conglomerative.

The first type is an association of companies, enterprises of the same industry, which produce the same goods or the same stages of production;

the second type is an association of firms from different industries, but connected by a certain technological production process finished products; the third type is characterized by the fact that there is a merger or acquisition of companies in various industries that have neither a target unity with the main field of activity nor a technological, economic entity carrying out the merger of companies.

World practice shows that the first type of cross-border mergers and acquisitions still prevails, the role of the third type is somewhat reduced, and transactions associated with the second type of corporate integration are significantly reduced. Thus, if in 1990 the share of horizontal mergers of companies accounted for 54.8% of the total number and 40.9% of the total value of cross-border mergers and acquisitions, then by the beginning of 2007 - 56.2% and 71.2%, respectively; conglomerate associations - 40.2% and 40.9%, 37.6% and 27%; vertical associations - 5% and 3.4%, 6.2% and 1.8%.

It is important to emphasize that the predominance of the first type of cross-border mergers and acquisitions largely determines the increasing degree of business consolidation and the increasing level of control over world markets by the largest TNCs.

In conclusion, the following conclusions must be drawn:

.2 Impact of the global financial crisis on the mergers and acquisitions market

.2.1 Specifics of the development of the global mergers and acquisitions market in the 21st century

Quantitative and qualitative analysis of the global mergers and acquisitions market in a global economic crisis helped to find the characteristic features of the mergers and acquisitions market in the period from 2007 to 2009.

A careful analysis of statistical data on the global mergers and acquisitions market during the crisis period revealed a number of main trends:

Decrease in value and quantity of transactions. According to authoritative economic publications, the total value of all M&A transactions in the world decreased by approximately 35% compared to the extremely successful 2007 and amounted to approximately $2.4 trillion in 2008. The number of transactions announced by companies decreased by 23% over the same period. Not taking into account the growth of the M&A market in the last quarter of 2009, the indicators were barely approaching the level of 2004-2005. As a result, the difference between the market volume of 2009 and 2007 amounted to a record 60% (see Fig. 1).

Due to falling prices for energy, metals, metallurgical and mining products, the volume and number of M&A transactions in the primary industries has dropped significantly. Despite this, M&A transactions were carried out extremely intensively in several sectors of the economy, in particular the financial sector and trade. Most of the deals announced in these industries were due to a sharp decline in the solvency of companies. The financial sector led the number of transactions in Eastern and Central Europe, the United States, and accounted for approximately 25% of the total global M&A market.

The number of canceled transactions has increased due to reasons related to inaccessibility borrowed money and lack of sufficient own funds, as well as due to a decrease in the value of assets planned for acquisition. Companies abandoned 1,309 deals worth $1,137 billion in 2008. For example, in 2007, a third fewer transactions were canceled - 870.

The amount of funds spent on cross-border mergers and acquisitions in 2007 amounted to $1.9 trillion, which accounted for 50% of the value of all global mergers and acquisitions. In 2008, the volume of funds amounted to $1.1 trillion. or (44%), and in 2009 $634 billion or (37.4%).

The Mergermarket Group/mergermarket.com

Rice. 1 - Dynamics of the global M&A market in 2003-2011. (quarterly, number and amount of transactions)

The active activity of the state as a regulator and participant in M&A transactions was manifested in a significant increase in the cost share of state investments in M&A and in the implementation of a number of anti-crisis measures. At times, during this period, the share of government investments in the M&A market reached 62% ($86 billion). The authorities of most countries have developed a variety of emergency financial assistance programs, including the adoption of new laws to stimulate the market, the direct purchase of assets of companies on the verge of bankruptcy, the injection of Money into the economy with the help of sovereign investment funds.

Taking into account the identified trends in the M&A market, I also highlighted the special motives of companies that determine the desire to merge or absorb companies characteristic of a crisis period. The most important factors that drove the companies to complete the transaction were: the need to save their core business, lack of available financing, and a decrease in the value of assets.

1.2.2 Characteristic features of mergers and acquisitions of companies during periods of economic ups and downs

A study of alternating periods of increased and decreased activity in the mergers and acquisitions market suggests that the acceleration of consolidation processes is necessarily accompanied by a period of economic recovery. However, these processes continue during periods of stagnation and recession, although less intensely. Despite the fact that absolutely each subsequent wave of increased activity in the M&A market was characterized by its own specifics, it is possible to characterize the general features of the M&A process during periods of economic growth and during periods of its recession. Comparative characteristics of the M&A market during periods of recovery and recession are presented in Table 1.

Table 1

Analysis of global imbalances arising in the economy and substantiation of their significance as the root causes of the global economic crisis of 2007-2009. led to the following conclusions:

Disproportions between the real economy and the financial sector, manifested in an increase in investment in the financial sector to the detriment of the real sector of the economy; in separating capital flows from flows of goods and services; in the outflow of human resources and capital from the real sector to the financial sector; in the rapid growth of derivatives volumes; in increasing the number of offshore companies that are poorly controlled and regulated.

Disproportions in the sectoral structure of the economy, reflected in the dominance of the service sector over the commodity sector in a number of economically developed countries and the predominance of primary industries over all other sectors in countries rich in natural resources. This led to the movement of resources from unclaimed sectors of the economy to developed ones (from the manufacturing, financial, human resources sectors of the economy), to a structural change in the economy, an increase in unemployment and a general decline in economic development.

Disproportions between investments developed countries and domestic savings, primarily the United States. As a result, a clear division has emerged in the world between creditor countries, with a high level of savings, such as the countries of the Asia-Pacific region, and debtor countries, financing their economies from the net savings of other countries.

The disproportion also manifested itself in the fact that such a division does not correspond to the balance of power in the economy. The United States, having enormous political influence and a high share in the global economy, also has the world's highest external debt, which is financed by its direct competitors.

An excess of non-core business assets available on the balance sheets of companies in the pre-crisis years and which have become an integral component of private and public companies. Too much diversification of assets has led to the dispersion of the companies' resources. In the context of the global crisis, this led to a deterioration in core activities and became extremely risky for the survival of companies.

Globalization and internationalization of markets in the world economy have not yet developed global instruments and regulatory mechanisms, supranational institutions and global rules of the game for absolutely all market participants without exception. Typically, all regulation occurs at the level of an individual state, which in turn leads to imbalances at the global level and is one of the causes of the crisis.

A number of data and other spontaneously established imbalances led to a crisis, which, in turn, forced a gradual change in the existing economic structure. The M&A market in this context has become an indicator that shows the presence of these imbalances. The M&A market also played the role of a mechanism that, during the recovery period, strengthened the existing imbalances in the global economy, and during the crisis, it acted as a mechanism to smooth them out.

The main sign of the presence of imbalances is the tendency for companies to increase sales of non-core assets during the crisis, the bulk of which were acquired in the pre-crisis period in order to diversify their business portfolio. The costs of liquidating non-core enterprises during a crisis, as a rule, turn out to be several times higher than their real value, therefore the processes of mergers and acquisitions as ways to avoid bankruptcy have become a fundamental trend of the crisis period.

During a crisis period, companies with assets abroad prefer to pay more attention to business located in their home country and allocate a significant part of their funds to its maintenance. In other words, they try to save their parent companies and, if possible, get rid of assets in other countries, which at some point ceased to be core for them. Moreover, cross-border transactions are increasingly showing an increase in the participation of developing countries. In 2009, China ranked second in the value of mergers and acquisitions, surpassing European countries. There are several explanations for this, firstly, the presence of a large amount of savings, which was aimed at investing in businesses in developed countries. We can conclude that the M&A market in this case showed an imbalance of investments and savings on a global scale.

Among cross-border transactions, a significant part of them could not be done without the participation of the state. What is noteworthy is that in 2009 the share of transactions with state participation reached 20%, taking into account that in previous years it rarely exceeded 3%. Governments poured in funds to rescue both financial companies and manufacturing enterprises, although the bulk of the funds were aimed at maintaining financial system. This is explained by the fact that enterprises in the real sector are directly dependent on the financial market, and negative fluctuations in the activities of banks and investment companies have a negative impact on manufacturing enterprises. The interaction between the state and the financial sector should ensure the stability of lending markets, and thus help improve the situation at manufacturing enterprises.

Industry trends in the M&A market during the crisis also reflected a change in the proportions in the global economic system. The conducted studies show that in the pre-crisis years, the leading positions in terms of the volume of mergers and acquisitions, as a rule, were occupied by the raw materials industries and the electric power industry, for which, in the context of globalization, the trend of consolidation is relevant. The ensuing crisis caused banks and industries largely dependent on external sources of financing to actively consolidate. Thus, the bulk of all mergers and acquisitions concluded were in the banking sector, real estate and retail trade, which indicates the close interaction of the real and financial sectors with the prevalence of the latter.

It is also worth noting that the choice of M&A as a method of debt restructuring demonstrated the companies’ significant debt dependence.

Chapter 2. Global experience in mergers and acquisitions

2.1 Organizational aspects of the transaction and financial analysis of its investment component

In modern corporate governance There are many different types of mergers and acquisitions of companies.

The main and most important classification features are the following (see Table 3):

· By the nature of company integration;

· By nationality of the merged companies;

· Regarding the attitude of companies to mergers;

· By the method of combining potential;

· Under the terms of the merger;

· By fusion mechanism.

Table 3. Classification of types of mergers and acquisitions of companies

Based on the existing development strategy of the company, decisions are made to initiate one or another type of integration process.

In essence, mergers and acquisitions integration processes are a means to achieve the company's goals and strategy. There are five stages in the implementation of integration processes:

Planning;

Finding ways to implement;

Evaluation and analysis of options;

Checking options;

Implementation of integration.

overall portfolio strategy (expanding and strengthening the production portfolio);

family (horizontal and vertical integration);

elemental (entering new market segments with new products).

Along with choosing a possible strategy option, it is necessary to assess the company's resources and capabilities. Ultimately, the company determines the type of integration and its characteristics: geography, direction, industry, openness of information. In addition, at the same time, the formation of the composition of participants takes place (the main ones, directly involved in the process, and the accompanying ones, which are regulatory authorities, government structures, credit organizations, etc.). At this stage, goals are set and restrictions are introduced, on the basis of which the following stages are carried out.

At the stage of searching for implementation options, it is noted that the basis includes planning results and selected criteria, and on the basis of this, potential integration participants are selected.

At this stage it is important to consider legislative aspect and ensure that actions fully comply with legal, accounting and tax regulations.

The selection of participants is based on satisfaction of the restrictions of the previous stage and the information collected on them.

There are two types of information:

external information that is collected from secondary sources (data from requests to the state registration authority, official publications in open sources - these are, for example, financial results, articles, press releases, advertising, exhibitions).

internal information - for example, obtaining the opinions of employees, partners, regulators (a mandatory requirement is the legality of the methods for collecting such data).

This information is divided according to several criteria: organizational and legal, financial, market.

Along with the analysis of information, candidates are selected and screened based on established requirements.

Having received a certain base of potential integration participants, the company proceeds to consider possible options carrying out the merger together with the selected candidates.

There are several options, divided into:

a) agreed merger through negotiations with the company’s top management;

b) an inconsistent process through a tender offer to shareholders to purchase their shares;

c) obtaining control over the Board of Directors by voting by proxy without purchasing a controlling interest.

When analyzing mergers and acquisitions, there are some aspects that require consideration.

One of the organizational aspects of mergers and acquisitions is the loss of independence in company management. A merger, to some extent, always limits the independence of top management and owners of participating companies. This may vary depending on the shape and type.

In addition, when creating an integrated participant, the scale of activity increases, which affects the degree of bureaucracy within and, to a certain extent, reduces the speed of decision-making. This affects the efficiency of managing the work of individual structural divisions. Thus, when choosing a merger method, not only the optimal degree of centralization is taken into account. Before entering into agreements, it is necessary to solve the problems of compatibility of corporate cultures and technologies. When merging companies, there are several rules:

strive as much as possible to ensure consistency of the process and obtain complete information about candidates in order to avoid possible negative consequences and cost reduction;

study the history of the participants ( Special attention it is necessary to pay attention to judicial and credit history), the opinions of partners and clients about the true reasons for participating in the process;

carefully check the information received during negotiations, take into account changes during the preliminary process and adjust the results obtained;

take into account the possible reaction of the market - depending on the integration tools used: participants, minority shareholders, partners, clients and authorities (including regulatory authorities);

develop a strategy for further joint work, work through crisis situations and contradictions between participants, up to and including abandoning integration.

In a specific list of cases current legislature obliges to coordinate mergers and acquisitions with the antimonopoly service. For example, when:

merger of commercial and financial companies;

acquisition by legal or an individual or a group of persons more than 20% of shares or interest in authorized capital a commercial or financial company as a result of several transactions;

completing a transaction to acquire more than 10% of the assets of a commercial or financial company.

These reasons, together with economic calculations, have a great influence on the preliminary stages of mergers and acquisitions. At this stage, it is important that participants receive the optimal picture and the optimal amount of information in order to make a decision about moving forward with the actual implementation of the transaction.

Motivational basis, i.e. a complex of various motivational factors that can influence decision-making on mergers and acquisitions looks like this:

operational (motives related to the current operating activities of the enterprise (production, sales));

financial (formation of the company’s financial resources, sources of financing, settlement of obligations);

investment (motives related to investment activities);

strategic motives (such areas as improving management efficiency, market research, relationships with partners/competitors, etc.).

These groups, together with the specific motives included in them, are interconnected by elements, since the process of mergers and acquisitions is often determined by a large number of intersecting motives. (see table 4):

Table 4. Motivational base of the company

Naturally, when completing a merger and acquisition transaction, the organization pursues the goal of extracting specific benefits, which is expressed in an increase in capital flow. The main theory that explains the reasons for this increase is that there is a synergistic effect as a result of the merger and further joint activities.

The synergistic effect is a very rare phenomenon, the occurrence of which is difficult to detect and is considered great luck and a signal for quick action to complete a transaction.

To make a merger and acquisition deal you need:

choose correctly organizational form transactions;

ensure strict compliance of the transaction with antimonopoly legislation;

have enough finances to unite;

quickly resolve the issue of determining the main thing during a merger;

If possible, quickly include not only middle and senior management personnel in the integration process.

Mergers improve the efficiency of the merging companies, but at the same time they can also worsen the results of current work and increase bureaucracy. It is always difficult to assess in advance the changes caused by a merger or acquisition.

Experts usually identify three reasons for failures in mergers and acquisitions: merger acquisition financial investment

the acquiring company incorrectly assessed the attractiveness of the market or the competitive position of the acquired company;

the amount of investment required to complete a merger or acquisition transaction has not been fully assessed;

errors were made during the merger or acquisition process.

In most cases, the investments needed to carry out mergers and acquisitions are underestimated. An error in estimating the value of a potential transaction can be very significant.

Financial analysis of transactionsM& A

In mergers and acquisitions, a simultaneous analysis of the organization’s financial statements before and after the merger and acquisition and the dynamics of their quotations at the time of receipt of information about future integration are used. Financial statement analysis compares the performance of different businesses before a merger and the same performance after a merger 2 years later. An accounting measure of performance is profitability, based on earnings before interest, taxes, depreciation, and amortization, because this form is more closely related to the company's cash flow and is not distorted by the company's financial policies.

To reflect the prospects, the dynamics of the organization’s quotes one week before and one week after the media announcement of a future transaction are taken into account. The ordinary profitability of the companies participating in the transaction is taken as a standard and the market index is also used as a standard. By adjusting for a market index, you can determine the individual returns of an organization's securities and promptly identify abnormal or excess returns.

Two characteristics that reflect investor expectations and market reaction to news of a merger or acquisition, as well as financial results a couple of years later. On the other hand, it is possible to determine the relationship between them through correlation analysis.

Regression analysis is used to find the relationship between the market reaction at the time information about the transaction appears and the financial results of the joint venture. The market reaction when information about a specific transaction appears is determined using data from the market as a whole. Market reaction refers to the profitability of a company's securities for the week and after the first announcement of the transaction.

It is assumed that a week is sufficient time to detect the effect of transaction information.

This period of a week is needed before the official release of information about the transaction in order to take into account insider information leaked before most of the investment community knew about it. On the other hand, it takes a week after receiving the message for all the information received to be reflected.

In accordance with the market return, which is the standard, the individual return of the organization’s shares is also adjusted. To do this, the yield of the main index of the exchange on which securities are traded is used.

To measure the relationship between historical and forward indicators, the excess return of the organization's shares is used, which is calculated as follows:

It is assumed that this operation helps to adjust the profitability of the shares of the companies participating in the transaction and the dynamics of the entire market and avoid general economic factors.

In this case, calculations of abnormal returns are used only for the company that is being acquired.

For a retrospective indicator, the dynamics of return on sales is taken based on EBITDA. If you have data on revenue and EBITDA of different companies before the merger, then you can estimate synthetic profitability as if the companies were already working together. It is assumed that the revenue and profit indicators of companies participating in the village will not deteriorate after it.

To determine the real result of the merger, you need to examine a period of two years after the transaction, which is measured through the accounting indicator of return on sales according to information annual reports, which compiles the financial results of the two companies, based on the following formula:

To measure the net effect, the indicator is constructed as follows. We calculated the difference between profitability a couple of years later and synthetic profitability before the merger.

If there are two sets of data, financial and accounting indicators and market indicators of the effect, then it is possible to identify the relationship between them through regression analysis.

The coefficient of determination (R^2) of the resulting regression is an indicator of the strength of the relationship between the data. A significant relationship confirms the hypothesis about effective assessment mergers and acquisitions market

.2 Financial instruments of mergers and acquisitions. The role of investment banks in this process

M&A financing refers to the investment of money to “pay for” the merger or acquisition.

Refinancing of such transactions means a change in the terms of payment for the transaction, which were previously provided for in the agreement.

The main methods of financing mergers and acquisitions are:

) debt financing;

) financing using own or share capital;

)mixed or hybrid financing.

These three methods are also called “paper financing”. Let's consider each financing method separately.

Debt financing

Debt financing instruments are:

term loan;

revolving loan and line of credit;

bridge loan;

commercial paper;

bonds;

financing using receivables;

purchase or sale of leasing.

Equity Financing

The equity method of financing an M&A transaction is the second method. That is, companies that decide to carry out a merger or acquisition transaction conduct an additional issue of shares, which in the future are exchanged for shares of the acquired or annexed organization.

The most common methods of paying for a transaction with shares of the acquiring company:

) new issue of shares;

) repurchase of shares from its shareholders;

) use of previously repurchased shares (treasurystock);

) use of under-allocated shares latest issue- shares located “on the shelf” (stock put “on the shelf”).

The main difference between debt financing and equity financing is that in the second case, the lender has the right to part of the profits of the company and to participate in its management, while the lender in the first case can only demand the return of the funds provided and the accrued interest. for using them.

Hybrid financing

Hybrid or mixed financing is the third type of financing for mergers and acquisitions. This type includes instruments that carry signs of financing with borrowed capital and the use of equity capital at the same time.

Hybrid financing instruments:

preference shares;

warrants;

convertible securities;

securitized loans and middle-of-the-road financing.

Preferred shares give their owner the opportunity to participate in the profits and assets of the company upon its liquidation. Typically, preferred shares are considered one of the riskier securities compared to bonds. As a result, investors typically demand high returns on these securities. Some preferred shares are similar to perpetual bonds and do not have a maturity date, but most are tied to a sinking fund and often require at least 2% of the issue to be redeemed.

A warrant is an option issued by a company giving the owner the right to buy a certain amount shares of a company at a specific price. Most often, warrants are used in a loan offering to induce investors to purchase a company's long-term debt bonds at a lower interest rate than would otherwise be available for purchase.

A convertible security is a bond or preferred share that certain conditions and at certain times, if the owner wishes, they can be exchanged for ordinary shares. When converting securities, no additional capital is introduced. This distinguishes them from warrants, which can bring additional funds to the firm. These exchange operations can only improve financial condition the company, since according to the balance sheet, the share of borrowed sources of financing in the total amount of funds used by the company decreases. This helps make it easier to attract additional capital. Most issuances of convertible securities may be callable, allowing the issuing company to either repay the loan or cause conversion. It depends on the relationship between the redemption price and the conversion value of the securities.

In general, companies that issue bonds with warrants are usually small and have a greater level of risk than companies that issue convertible bonds.

Asset securitization is the conversion of a firm's debt into securities, which are subsequently placed between investors. Therefore, securitized loans are loans to a company that are converted into securities. One of the first types of securitized assets were mortgage-backed securities. In modern times, the collateral or object of securitization is a variety of assets, including the company's receivables.

It must be said that securitized loans can only be used by large companies when financing mergers or acquisitions. For potential creditors, medium and small companies are not so attractive because they cannot fully guarantee their payments.

Middle financing, as well as second-tier financing, is an unsecured loan that guarantees the lender the right to participate in the future in the capital of the company. This participation is carried out through the transfer to the lender of convertible bonds, convertible preferred shares or warrants. Most often, middle financing is used with the help of the latter. An unsecured loan is a term loan of 5 to 10 years, obliging the company to pay interest regularly throughout the term, with the principal repayable at the end of the period.

This name was received because the funds obtained in this way are, as it were, in the middle between ordinary borrowed funds and funds. Which are obtained using share capital. And investors who provided funds to a company through middle-of-the-road financing, after that company has covered its liabilities, can receive reimbursement after standard loans, but before shareholders.

Middle financing helps a company raise more borrowed funds than can be guaranteed by the collateral, but the interest rate will be higher.

In this case, middle financing is similar to junk bonds, but differs from them in that it has the specific characteristics of financing using equity capital and is always placed only by private subscription. Venture capital firms are typically the source of middle-of-the-road funding.

Company buyout

A company buyout is a change in the form of ownership of a company, resulting in the transfer of control over it to a group of creditors or investors. Most buyout transactions require the raising of huge amounts of borrowed funds. This is the peculiarity of such a transaction. These deals are called leveraged buyouts (LBOs).

They differ in who carries out the transaction - company management, employees. Investors, etc. Most often, the basis for debt financing of a buyout transaction (up to 60% of total liabilities) is a large loan secured by the company’s assets and its promising income. This loan is called primary or preferred status. The initiators of the transaction usually invest their own funds no more than 10% of the total financial resources. The rest of the capital is raised through the issuance of junk bonds, which, as discussed above, have high yields but weak collateral, because all the company's assets are used to secure the loan, which forms the basis of all financing.

Buyout of a company by managers, or MBO

Often, when releasing a non-core line of business, a company may resort to a management buyout. In this case subsidiary or one of the divisions is separated from the structure of the parent company and transferred to the hands of the senior management of this division, while dividing it into a partnership or closed joint stock company. In this process, along with the advantages of spinning off a business, there are also features that are an incentive to carry out such operations:

) company managers who are well acquainted with their business become the owners of the company, and their primary task is to effectively run their own business, since their well-being directly depends on the well-being of the company;

) the desire to increase the level of profitability and increase the level of competitiveness will be dictated by the presence of significant debt obligations of the newly formed company and the need to service them.

The role of investment banks

Buying and selling a company is an activity where the experience of the board and supervisory board may be lacking. Of course, the company's management must understand the strategy and purpose of the merger or acquisition, as well as how their business will develop after the end of this process, since the merger or acquisition itself requires specific skills and knowledge. They may be owned by investment banks that specialize in mergers and acquisitions.

Typically, the services that investment banks provide in mergers and acquisitions include:

financial advice, i.e. analytical studies of industry conditions and competitive environment, determining the range of enterprises that are interesting for organizing an alliance, developing and agreeing with the client merger or acquisition scenarios, developing financing schemes, developing a concept for the development of the holding.

organization of mergers and acquisitions, i.e. searching for potential participants in the transaction, negotiating and agreeing on the terms of a merger or acquisition, implementing the acquisition by purchasing shares or debt obligations of the target of the acquisition.

Hostile Takeover Protection

Protection can include a whole range of methods and measures.

Establishing a fair price (valuation activity). The need to prove to shareholders that the agreed price is fair usually arises during a “friendly” merger or acquisition.

In a “hostile” takeover, the acquiring company is interested in setting a minimum price, while the acquired company, on the contrary, is interested in setting a maximum price.

Financing of mergers and acquisitions. An investment bank may seek additional resources if the acquiring party does not have sufficient available cash.

.3 Russian practice of mergers and acquisitions: problems and prospects

By the beginning of the 21st century, the process of privatization distribution of property was completed in Russia, while the United States was able to go through 5 waves of mergers and acquisitions in about 100 years.

But by 2003, Russia was named the most powerful force in the M&A market in Central and Eastern Europe.

The short history of the development of the Russian mergers and acquisitions market can roughly be divided into several periods.

This method was relevant both as an independent mechanism and within the framework of the expansionist strategy of the first financial and industrial groups - financial industrial groups (primarily informal banking origins). Most financial and industrial groups were created through privatization during this period. Many banks and portfolio investment funds have carried out acquisitions of companies in various fields for their own needs and for further resale to strategic investors or non-residents.

In the first half of the 1990s, there were also isolated attempts to use classical acquisition methods, primarily in industries that did not require a high concentration of financial resources.

The second stage (“post-crisis boom” of 1999-2002 during the period of recovery growth) is associated with the redistribution of property after the crisis in 1998. It is characterized by high activity in the hostile takeover market and a large share of “speculative” mergers and acquisitions in the total market volume. During this period, specific features emerged that caused a wave of mergers and acquisitions. The main incentive for their activation was the further consolidation of share capital. Due to the specific methods used, many analysts did not want to use the term “mergers and acquisitions” and wanted to limit themselves to the more familiar term “ownership redistribution”. The expansion of industrial groups was combined with an intensification of the process of consolidation of assets, mainly around established and newly created business groups.

After the crisis, the financial situation accelerated the pace of mergers and acquisitions in those areas of the economy where there was a readiness for mergers and acquisitions before the crisis. First, the process of mergers and acquisitions was launched by the largest oil companies, and later also captured ferrous and non-ferrous metallurgy, chemistry, coal industry, mechanical engineering, food, pharmaceutical and forestry industries.

At this stage, the massive use of hostile takeover technology began, taking advantage of gaps in the legislation that regulated the activities of legal entities, as well as the corruption of the administrative apparatus.

Raider companies appeared on the market, seizing companies not to develop their core activities, but in order to sell the most valuable assets. Companies with good real estate were considered the most attractive.

Despite the fact that there are a number of restrictions (the need to consolidate large blocks of shares, a clear and fixed ownership structure in the corporation, significant liquid resources), it is hostile takeovers that have received the greatest development in Russia. If we take into account the entire list of classical and Russian-specific acquisition methods, it can be noted that after 1998 their number became enormous.

By 2003, when most vertically integrated structures were formed and political risks increased, capital activity within the mergers and acquisitions market decreased significantly. This “reorganization decline” was associated, first of all, with the initial completion of consolidation processes and the emerging transition to legal and economic restructuring of “unregistered” holdings (groups), legalization and consolidation of ownership rights to economic assets. Medium integrated structures - companies of the second and third echelons - took an active part in this process.

The third stage (the stage of economic growth in 2003 - before the start of the crisis in 2008) was distinguished by the fact that the state took a high share of participation in the process of mergers and acquisitions. The role of “civilized” types of transactions increased, with a positive increase in the use of a transparent mechanism for property restructuring, as well as the number of stock market instruments conducting transactions.

This period is characterized by a stable increase in activity in the mergers and acquisitions market both in terms of value and the number of transactions carried out. In 2007, it increased seven times compared to 2003 and amounted to $124 billion, and in 2003 - $19 billion. The number of transactions also increased - in 2003 there were 180, and in 2007 - 486. Until 2008 By industry, oil and gas companies, metallurgical and communications companies were distinguished by the volume of transactions. In 2006, the market volume was 4.5% of GDP, and in 2007 it reached more than 10%.

Compared to 2003, the transaction value in 2004 increased by 40%. In the next two years, the growth rate slowed down somewhat and was already 17% in 2005 and 4% in 2006. A larger increase in the value of transactions was observed on average in 2007 and increased by 130%. But it should still be noted that in Russia, transactions in the amount of 30-40 million dollars predominate, including company assets, and in the Western market such transactions are considered average.

This can be explained by the fact that the most liquid and attractive assets had already acquired owners, and in each area there were already major groups of players. Despite the decrease in the number of transactions, their average value in 2008 increased by 30% compared to 2007. Moreover, in the period from 2003 to 2008, transactions worth more than $500 million were carried out. About 116, which in percentage terms is about 6.3% of all transactions under consideration.

The specific features of the Russian mergers and acquisitions market during this period were:

weak direct regulatory control government agencies behind the ongoing processes of mergers and acquisitions;

low involvement of organized stock market instruments in the process of mergers and acquisitions, since more transactions took place with private companies rather than with securities of public companies;

no significant influence of minority shareholders on the company's work;

in most processes, the main owner of the company is its top manager;

there was no transparent ownership structure of formally public companies;

concentration in one hand on average of a larger number of shares. Than in Western companies;

a high proportion of mergers and acquisitions are carried out using offshore companies.

The number of offshore companies that were created by Russian residents, according to some estimates, ranges from 3.5 to 4% (about 100 thousand) of all that exist in the world. Since the beginning of the 2000s, the use of offshore companies as elements of Russian holdings to accumulate the main income of the company has become widespread. The Ministry of Finance of the Russian Federation and the Antimonopoly Service are discussing the problem of creating a mechanism for controlling the assets and activities of offshore companies, but no radical measures have yet been taken.

The Russian market is characterized by a large share of transactions involving foreign capital. For example, in 2007, such transactions accounted for 22% of the total volume of the Russian market, and in 2006 they amounted to 35%. Purchases by foreign investors were greater than investments by Russian investors abroad.

In 2003-2008, entire companies were most often acquired. This confirms that the development trend in the corporate sector was to establish complete control over the company.

This characterizes almost all industries and regions and there is no clear dependence on the method of merger or acquisition or on the industry or geography.

The share of this form of integration of companies, such as obtaining full control, in the mergers and acquisitions market in the total volume of transactions for this period amounted to 88.2%, and in value terms 82.45%.

Number of transactions to purchase half of the property, i.e. half of the share in the authorized capital or 50% of the company's shares amounted to 5.8% of the total number of transactions or in value terms 6.4%. The acquisition of a blocking stake, or 26-49% of the company, occurs in 4.3% of transactions (in value terms - 4.6%). A share of 1-25% was acquired in 1.6% of transactions (in value terms - 1.8%).

It must be said that 1,221 transactions out of 1,393 analyzed were related to gaining control over a Russian company, which amounted to 66% of the total transaction value. Enterprises from countries European Union When acquiring a company in Russia, in 91% of cases they had full control over it, half of the company was acquired by 4% and only a 2% block stake or from 20 to 49% in the authorized capital. Buyers from neighboring countries acquired control in 80% of transactions, and in the remaining 20% ​​only half of the company in the Russian Federation. Other foreign companies full control of the company was acquired in 88.5% of cases, half in 6.4% of cases, and up to a 49% stake in the company in 5.1% of cases.

At this stage, the number of mergers and acquisitions involving borrowed funds and the buyout of a business share by the enterprise management increased. The share of such transactions in the total number was 4% in 2006. As a rule, almost all securities repurchase transactions in Russia were carried out using borrowed capital due to a lack of own funds.

The fact that the number of “civilized” transactions increased and relative to the decline in the dynamics of the most high-profile “raider takeovers” did not mean that the problem of “hostile takeovers” was not so relevant.

In 2007, there were about 107 public conflicts in progress in Russia, with a total asset value of $7 billion. Some market estimates suggest that the volume of hostile takeovers could account for up to 40% of the volume of all public transactions.

Also, the use of administrative resources and non-market methods for the purpose of acquiring assets by the state and state-owned companies meant the transition of the raiding system to a new state level.

At the same time, along with the creation of state corporations, criminal cases were initiated against the owners of the largest assets and the assets that were seized passed in the future under the control of the state.

These factors, such as high concentration, poor development of market institutions and poor performance of the judicial system, opacity of property rights and corruption, can have a systemic impact on all aspects of work in the Russian mergers and acquisitions market.

Also, the low transparency of information about transactions, the lack of professionals in intermediaries and the active participation of state-owned companies in these processes indicate that there is a problem in the efficiency of the market for corporate control.

Fourth stage

The onset of the financial crisis in 2008 marked the fourth stage in the development of the domestic mergers and acquisitions market. Economists say quite unanimously about the results of its development that the market will fall compared to 2007. This will happen for the first time after a stable period from 2002 to 2007.

Absolute estimates of the decline in market capacity vary depending on the methods used: by 36% (from $120-122 billion to 77.5 billion, if we take into account transactions over $5 million - M&A Intelligence), by 9%, or up to 120 billion dollars, of which almost 100 billion were for the purchase of Russian assets (if all transactions are taken into account - Ernst & Young). The ratio of the volume of the mergers and acquisitions market to GDP in 2008 was about 7% (in 2007 - 10%) from May 2008 to February 2009, the capitalization of the Russian stock market fell 4 times - from 1.5 trillion to $370 billion).

At the same time, the activity of insider activity, large shareholders and the manager in the first place.

Many companies began repurchasing their shares on the open market in the summer of 2008. Based on data on the dynamics of shareholder transactions of the 500 largest public companies, the second half of 2008 was characterized by a large decline in the number of transactions in which management sold shares of their companies. Conversely, there has been an increase in the number of transactions in which insiders are buyers of shares in their companies, even in cases where they were sellers in the past. It will be shown below that this policy also becomes characteristic of the state in times of crisis.

In addition, another channel for the redistribution of assets in 2008 was the forced sale of securities of Russian companies pledged for bank loans. Most companies were able to retain their assets. Another feature of the Russian credit market is the dominance of banks in corporate lending. For example, in September 2008 they accounted for 92.7% of the total loan portfolio of Russian banks in the non-financial sector of 11.8 trillion. rub.

The transfer of assets is caused by incipient defaults on corporate debt obligations. At the beginning of November 2008, the total amount of issues with defaults was about 30 billion rubles. In 2009, cases of settling debt obligations by transferring assets to the lending bank became known. This happened in the field of retail, construction, food production, retail services mobile communications etc. The likelihood that these assets will be put up for sale in the future is quite high.

Although global transaction volumes remained above the 2006 level, activity in the 2009 market was still noticeably decreasing. In Russia at that time, the number of transactions was less than 50% of transactions in 2006.

However, in 2011, activity in the Russian mergers and acquisitions market was characterized by relatively high stability compared to the global background. The number of announced deals increased by 5% to 394, although, unlike the US and Europe, the Russian M&A market was dominated (85%) by small deals to raise seed capital (<10 млн. долл. США) и сделки среднего размера (>US$10 million<250 млн долл. США). Начало 2011 года напоминало конец 2010: в первом полугодии было объявлено сделках, на которые пришлось почти две трети от общей суммы сделок (во втором полугодии 2010 года было объявлено 77% сделок). Но во втором полугодии 2011 года совершение сделок замедлилось в связи с ростом беспокойства относительно экономических перспектив в Европе и характерного снижения деловой активности в России в преддверии выборов президента. Это привело к тому, что общая сумма сделок, объявленных в 2011 году, составила 71,1 млрд. долл. США.

In 2011, the acquisition of Russian assets by foreign companies accounted for 20% of all transactions (in 2010 such transactions were 18%), and the share of transactions for the purchase of foreign assets by Russian companies increased to 10% (compared to 6% in 2010), mainly Thanks to deals in the telecommunications and media sector and the metals and mining sector, more than half of all foreign asset acquisitions were concluded in these sectors. The relatively low volume of transactions for the purchase of Russian assets by foreigners is due not only to the difficult economic situation outside Russia. It also suggests that Russia is not moving quickly enough to improve its investment climate and reputation among foreign investors. Given Russia's lower expected growth rate compared to other BRIC countries and the resulting worsening risk/return ratio, the Russian market appears to have lost some of its attractiveness to investors.

In 2011, the greatest activity in the Russian M&A market was observed in three sectors related to energy and natural resources: metals and mining, oil and gas and energy, and utilities. These three sectors accounted for approximately 45% of the total transaction value and approximately 25% of the total transaction volume, and a similar situation was observed in the previous year. Also in 2011, the share of other three sectors in the total amount of transactions increased significantly - real estate and construction, transport and infrastructure, and financial services.

The amount of the 10 largest transactions in the Russian mergers and acquisitions market in 2011 amounted to 25.9 billion US dollars, or 36% of the total value of announced transactions. Seven of the ten largest deals were in the energy and natural resources sector.

) mergers and acquisitions are one of the most important patterns of development of a modern market economy. The importance lies, first of all, in the fact that they significantly stimulate business consolidation, increase the degree of concentration of production and capital and, on this basis, the scale of control of large corporations in a market economy;

) the system of mergers and acquisitions includes two main directions, between which there is a certain connection and interdependence. This is intranational and transnational, or transborder. In recent years, the role of the second direction has noticeably increased;

) mergers and acquisitions are a “wave-like” process, i.e. includes high tides, high tides, low tides and low tides. This process is based on the cyclical nature of the development of a market economy;

) under the influence of market factors, significant quantitative and qualitative changes occur in the system of cross-border mergers and acquisitions. In modern conditions, this system is acquiring a global character, is characterized by increasing pace and scale, covers all industries and spheres, the leading role belongs to the largest transactions (megamergers), and has a significant impact on the development of foreign economic relations, especially on the international movement of capital, primarily direct investment.

Industry trends in the mergers and acquisitions market during the crisis period also reflected the imbalances present in the economy. Statistics show that in the pre-crisis years, the world leaders in terms of the volume of M&A transactions, as a rule, were the primary industries and the electric power industry, which, in the context of globalization, have become characterized by a trend of consolidation. The collapse of the financial system led to the fact that primarily the banking sector and industries that did not have the opportunity to develop only at their own expense and were heavily dependent on loans began to actively consolidate, i.e. from the financial sector. Banks, real estate and retail accounted for the lion's share of all M&A transactions concluded, which once again demonstrates the strong dependence of the real sector on the financial sector, with the dominance of the latter.

In addition, the choice of mergers and acquisitions as a method of debt restructuring demonstrated the high debt dependence of companies.

LITERATURE

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Vladimirova I.G. Publication "Mergers and Acquisitions of Companies", magazine "Management in Russia and Abroad" No. 56/2010;

Mergers & Acquisitions (M&As) are transactions that, along with the transfer of ownership rights, imply, first of all, a change in control of the enterprise (Corporate Control). Consequently, the acquisition of minor, incl. focused solely on obtaining speculative income, shareholdings on the part of individuals and/or institutional investors (portfolio investments) do not apply to them.

The concept of acquisition covers the acquisition of an entire enterprise, its individual parts, as well as strategic participation in capital (direct investment). Mergers, in turn, represent a special form of takeover in which the acquired company is deprived of its legal independence. Often a takeover is referred to as an acquisition (Takeover), which can be carried out with the support of the target company's management (Friendly Takeover) or against its expressed wishes (Hostile Takeover). In the case where, during a merger, both participating enterprises lose their legal independence and become part of the new company, they often talk about consolidation.

Classification of the main types of mergers and acquisitions of companies.

Depending on the nature of company integration, the following types are distinguished:

Horizontal merger of a company. This is nothing more than a connection between two companies offering the same products. The advantages are visible to the naked eye: opportunities for development increase, competition decreases, etc.

A vertical merger of a company is a combination of a number of companies, one of which is a supplier of raw materials to the other. Then the cost of production is rapidly reduced, and there is a rapid increase in profits.

Generic (parallel) mergers are an association of companies producing interrelated products. For example, a company that produces cameras merges with a company that produces photographic film.

Conglomerate (circular) mergers are an association of companies that are not interconnected by any production or sales relations, that is, a merger of this type is a merger of a company in one industry with a company in another industry that is neither a supplier, nor a consumer, nor a competitor.

Reorganization is a merger of companies involved in different areas of business.

According to analytical estimates, about fifteen thousand M&A transactions are concluded annually in the world. The United States occupies the leading position in terms of transaction amounts and volumes. Obvious reasons: today the US economy is experiencing perhaps the most favorable period (at the moment the situation is worsening due to the economic crisis). Smart people invest all their free money in business. It is logical that investors seek to maintain and stabilize direct control over the use of their finances. The best option for this is direct participation in the management of the company. Therefore, merging companies is one of the investor’s opportunities to manage their capital personally.

Geographically, transactions can be divided into:

Local;

Regional;

National;

International;

Transnational (with participation in transactions of transnational corporations).

Depending on the attitude of the company’s management personnel to the merger or acquisition transaction, the following can be distinguished:

Friendly;

Hostile.

By nationality we can distinguish:

Internal transactions (that is, occurring within one state);

Export (transfer of control rights by foreign market participants);

Imported (acquisition of control rights over a company abroad);

Mixed (with the participation of transnational corporations or companies with assets in several different countries in the transaction).

Impact on the economy:

A number of economists argue that mergers and acquisitions are a common phenomenon in market economies and that ownership rotation is necessary to maintain efficiency and prevent stagnation. Another part of managers believe that mergers and acquisitions “kill” fair competition and do not lead to the development of the national economy, since they destroy stability and confidence in the future, diverting resources to defense. There are conflicting opinions on this matter:

Lee Iacocca, in his book “Manager's Career,” condemns mergers and acquisitions, but calmly looks at the creation of super-concerns as an alternative to M&A.

Yuri Borisov in his book “Russian M&A Games” described the history of the redistribution of property in Russia and the creation of private monster companies after privatization through mergers, acquisitions and forceful raiding as a natural process.

Yuri Ignatishin in his book “Mergers and Acquisitions: Strategy, Tactics, Finance” considers M&A transactions as one of the tools of a company’s development strategy, which, if used correctly and carefully, can give a synergistic effect.

Merger- is a merger of two or more economic entities, as a result of which a new, united economic unit is formed.

· Merger of forms - a merger in which the merged companies cease to exist as autonomous legal entities and taxpayers. The company formed through the merger takes full control and direct management of all assets and liabilities to clients of the companies that took part in the merger.

· Merger of assets - a merger with the transfer by the owners of participating companies as a contribution to the authorized capital of the rights of control over their companies and the preservation of the activities and legal form of the latter; the contribution in this case can only be the rights of control over the company.

· Merger - in this case, one of the merging companies continues to operate, and the rest lose their independence and cease to exist as legal entities; all rights and obligations of the merged companies are transferred to the remaining company.

Absorption

Depending on the nature of company integration, the following types are distinguished:

· Horizontal merger of the company. This is nothing more than the union of two or more companies offering the same products into one company. The advantages are obvious: opportunities for development increase, the merger formed is much more competitive, etc.

· A vertical merger of a company is a merger of a number of companies, one of which is a supplier of raw materials to the other. In this case, the cost of production is sharply reduced and the profitability of production increases sharply.

· Generic (parallel) mergers - an association of companies producing interrelated goods. For example, a company that produces computers merges with a company that produces components for them. The benefit is the concentration of the production process within one company. Naturally, this optimizes production costs, and as a result, the company created through the merger is more profitable than those participating in the merger combined.

· Conglomerate (circular) mergers - an association of companies that are not interconnected by any production or sales relations, that is, a merger of this type is a merger of a company in one industry with a company in another industry that is neither a supplier, nor a consumer, nor a competitor. The benefits of such a merger are not obvious and depend on the specific situation.

· Reorganization - a merger of companies involved in different areas of business. The benefits of such a merger also depend on the specific situation.

According to analytical estimates, about fifteen thousand M&A transactions are concluded annually in the world. The United States occupies the leading position in terms of the amount and volume of merger transactions. Obvious reasons: today the US economy, which until recently was experiencing perhaps the most favorable period, has entered a state of crisis. Smart people invest all their free money in business. It is logical that investors seek to maintain and stabilize direct control over the use of their finances. The best option for this is direct participation in the management of the company. Therefore, a merger of companies is one of the investor’s opportunities to manage their capital personally.

Based on geography, merger transactions can be divided into:

· local

· regional

· national

· international

· transnational (with participation in transactions of transnational corporations).

Depending on the attitude of the company’s management personnel to the merger or acquisition transaction, the following can be distinguished:

· friendly

· hostile

By nationality we can distinguish:

· internal transactions (that is, occurring within one state)

· export (transfer of control rights by foreign market participants)

· imported (acquisition of control rights over a company abroad)

· mixed (with the participation of transnational corporations or companies with assets in several different countries in the transaction).

29. The effectiveness of mergers and acquisitions of international companies.

Merger- is a merger of two or more economic entities, as a result of which a new, united economic unit is formed

Absorption is a transaction made with the aim of establishing control over a business company and carried out by acquiring more than 30% of the authorized capital (shares, interests, etc.) of the acquired company, while maintaining the legal independence of the company.

The relevance of assessing the effectiveness of mergers and acquisitions of companies is associated with globalization processes, which at the micro level are manifested in powerful integration processes. There is an urgent need to merge companies in order to survive in an increasingly competitive environment. As a result, firms pass into the hands of more rational owners, and mergers and acquisitions themselves increase the efficiency of the economy as a whole.