The art of surfing the waves of mergers and acquisitions : An empirical study on the macroeconomic determinants of mergers and acquisitions in Sweden

Sammanfattning: This thesis examines the linkages between macroeconomic variables and the number of domestic Mergers & Acquisitions (M&A) in Sweden during 1998-2011 (in terms of changes). This study treats stationary times series data, from which multiple regression models are assembled. These models include gross domestic product, OMX Stockholm price index, lending rate, money supply, debt rate, consumer confidence, the unemployment rate and capacity utilization as explanatory variables. Aggregate number of M&As is set to the dependent variable. The outcome was that gross domestic product, money supply, unemployment rate and stock prices can help explain fluctuations in M&A activity during different time frames. However, the majority of the explanation for fluctuations in M&A activity lies within factors beyond ourestimation model. Through a Granger-causality test, we establish if the significant variables can help to predict M&A activity and vice versa. During different time periods gross domestic product and unemployment helps in predicting M&A activity. M&A activity also improves the prediction of gross domestic product in some time periods.