THE EVALUATION OF IMPACT OF MERGERS ON THE MARKET ECONOMIC ACTIVITY: THE CASE OF LITHUANIAN TELECOMMUNICATION SECTOR
Keywords:mergers and acquisitions, ex-post analysis, economic activity and valuation, synergy, market, competition.
This paper focuses on the merger and acquisitions valuation, the research aims to evaluate it’s impact on the market economic activity. The research problem lays upon inconsistent valuation methodology of different economic subjects in these processes and the calibration of complex valuation methodology. Many researchers approach the evaluation of impact on the economic activity only by narrowing the valuation object by the firm, market or competitors, consumer and state. The aim of this paper is to show that mergers and acquisitions should not be evaluated from only one point of view because while one perspective gives a positive economic effect on the economic activity, the other perspective could show a negative effect. A valuation from only one perspective could result in a misleading understanding of mergers and acquisitions processes in the market economic activity. Therefore a valuation towards mergers and acquisitions should be constructed from separate valuations angles in the economic system. A practical case study with a designed research model is carried out to show the outcomes of the process by the different participants (firm; market and competitors; consumers; government) of the economic system. The method is constructed of financial valuation tools, economic indicators, forecast methods and mathematical-statistical calculations. This paper has shown that only a case study analysis could identify the real effect of mergers and acquisitions to the economic activity. Also, the paper suggests that there is a difference between national governments and European Union governance of these processes, therefore a member of the union should comply with these guidelines and even transpose them into national law.