Interference of mergers and acquisitions in the profitability of publicly held companies in the food and beverage sector: an approach through intervention models

Abstract

The world economy has undergone changes in recent decades. In response to this market volatility, companies are adopting as strategy the merger and acquisition processes (M&A). In the meantime, the assumptions made in the study are that merger and acquisition events intervene, or not, on the profitability of companies. The survey done was of quantitative character. To outline the study, it was decided to calculate the ratio of market concentration (market share) of order four (CR4), for the Food and Beverage sector, and were selected for the study the four companies with the largest market share (JBS, Ambev, BRF and Marfrig). The aim of the study was to assess the impact of announcements of M&A events on profitability metrics (indexes of profitability and stock value) of Brazilian publicly traded companies. For this, it was shaped up through the event announcement date the intervention methodology using the Box-Jenkins models. By this method, it was found that the expected result of synergy is not likely to occur, this is, the search resulted in 30 statistically significant interventions; in these, 57% showed positive interventions and 43% brought negative implications, confirming the need of new research in the field and a more detailed knowledge of the process by managers. The results show that the intervention methodology demonstrates good results for the study of M&A, indicating that the M&A influence the series of stock prices and the metrics of financial ratios.