Corporate Acquisitions and the Operating Performance of Swedish Companies

Sammanfattning: Mergers and acquisitions play today an important role for the expansion of firms and are the result of strategic plans developed by management. In marketing and rationalizing acquisitions, company leaders make use of operating synergies as one of the major motives for engaging in acquisitions. This thesis aims at studying the difference between corporate expectations and the realized operating synergies. In our study we have included eight mergers and acquisitions where Swedish companies have conducted a large acquisition of another listed company during the period 2000-2007. We seek to uncover the effects of an acquisition on operating performance and comparing it to corporate expectations prior to the takeover. Although operational improvements are observed, our findings are in-line with theory stating that managers are likely to overstate their expectations regarding the potential synergies that can be realized from an acquisition.