MERGERS AS A COMPETITIVENESS STRATEGY IN DIFFERENT BUSINESS SECTORS DURING ECONOMIC CRISIS PERIOD: EVIDENCE FROM GREECE

Abstract

This paper investigates the accounting performance of companies listed on the Athens Stock Exchange after mergers by the industrial sector during the period of the financial crisis in Greece. More specifically, all mergers of listed companies during the period 2012–2016 are examined, with the analysis of a final sample of twenty-six companies listed on the Athens Stock Exchange. The evaluation of the accounting statements and the performance of Greek listed companies is done by extracting and comparing various figures from them (financial ratios) before and after the implementation of mergers. This research is based on the methodology of Healy, Palepu, and Ruback (1992) and Ramaswamy and Waegelein (2003) in order to explore if there is a positive or negative result from the merger transaction. The research results did not show any statistically significant change in any of the research financial ratios after the mergers. However, the effect of the absorbing company’s industry was examined in relation to the analyzed financial ratios and no better performance was observed for those in any industry. Finally, mergers as a competitiveness strategy in the business arena managed to provide the involved companies with a stable accounting performance during the crisis period in Greece.