The Effect of Mergers & Acquisitions on the Performances of the Companies

Abstract

In recent years, the importance of mergers and acquisitions transactions has increased nationally and internationally as a result of globalization and developing technology. As a growth strategy, companies prefer mergers and acquisitions transactions because in this way; they have opportunities to combine their powers mutually and keep on taking place in a competitive area. This study aims to investigate which reasons encourage businesses for mergers and acquisitions, failure and success elements, and the process of mergers and acquisitions. In this study, the method used for the case study is Ratio Analysis which provides to compare the information concerning profitability, efficiency, and the financial structure of the companies before and after mergers and acquisitions. Thus, as a result of the financial status acquired after the merger, it can be revealed which factors can affect the performance of the companies. In this research, the merger activity between the companies AKIS Real Estate Investment Trust and SAF Real Estate Investment Trust which are the pioneer company in their sector analyzed using financial tables with ratio analysis. With this analysis method, liquidity rate analysis, leverage ratio analysis, activity rate analysis, and profitability ratio analysis were determined and the performance of the company after merger deals was indicated. Lack of cultural differences between the companies eased the process of combination and affected the performance of the companies positively.