An Analysis of M&A Activity in the European SME Market and Value Drivers of Post-Merger Performance

Sammanfattning: Abstract This thesis investigates the impacts pre-merger characteristics play in long-term post-merger performance from a sample of small and medium sized enterprises whom conducted M&A activity within the European Union between the time period of 2011-2013. Using data collected, a quantitative analysis was performed to measure the impact of six separate factors on post-merger performance analyzing the abnormal ROA through the inclusion of pre-merger performance as a control variable. Overall, our results concluded that SMEs behave differently when engaging in M&A than their larger counterparts. Our analysis found that both previous M&A experience and cross-border transactions negatively impact performance, whilst we found no empirical evidence to support firm size, liquidity or cross-industry mergers to have a significant impact on long-term post-merger performance.