Home
POST-ACQUISITION EFFECTS OF MERGERS AND ACQUISITIONS: AN APPROACH FROM THE PERSPECTIVE OF AGENCY THEORY
Ecaterina ULIAN, PhD Student
Moldova State University
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Universal Decimal Classification: 339.18:658.012.4
JEL Classification: G32, G34, L81
Abstract
The aim of this scientific paper is to analyse the post-acquisition effects of mergers and acquisitions (M&A) from the perspective of agency theory, with a focus on managerial behaviours that can influence the financial performance of the company acquiring in M&A transactions. The research examines the extent to which managerial decisions regarding the target company overvaluation may lead to distortions in post-transaction profitability. The applied methodology combines theoretical synthesis and deductive reasoning and includes qualitative and quantitative research methods. This includes literature mapping, financial statement evaluation, comparative analysis, and logical deduction. These methods were used to correlate the decision-making mechanisms of economic agents with the subsequent financial performance of companies involved in M&A transactions. The results confirm the research hypothesis: in many cases, the management of the acquiring company tends to overvalue the target company, which leads to distortions in profitability indicators during the post-acquisition period. These decisions are often justified by the expectation of success fees or performance - based bonuses, which encourage opportunistic behaviour among managers. The findings highlight the relevance of applying agency theory in analysing the motivations and efficiency of acquisition decisions, emphasizing the need for stronger corporate governance and control mechanisms in strategic decision-making processes.
Keywords: M&A, agency theory, performance, premiums