The effect of mergers and acquisitions on financials of Turkey's manufacturing industry

Companies apply different competitive strategies to maintain and increase their market shares in an increasingly competitive environment due to globalization. One of the most commonly used competitive strategies in national and international markets is mergers and acquisitions. This study proposes to search the effect of M&As on the productivity and efficiency of acquirers. This study adopts Data Envelopment Analysis based on Malmquist Total Factor Productivity Index to analyze the performance of the acquirers after mergers in short term and long term period. 13 M&A deals conducted by Turkish manufacturing companies from 2007-2011 were analyzed in order to measure the post-merger performance of acquiring companies after merger. The financial ratios over the 5-year consolidated financial data of the acquirers for the pre and post merger periods were used in this study. According to the conclusion of Malmquist Total Factor Productivity Index; the Developers' productivity realizes growth after M&A. Developers' technology has got noticable progress after acquisition in the short term, but gradually reduce in the long term. Their technical efficiency slightly decreased after acquisition in the short term, but increased in long term due to realization of integration and synergy.