Changes in Property and Ownership Structure of Companies as a Consequence of Mergers in the Czech Republic

Jaroslav Sedlacek, Petr Valouch, Eva Hyblova, Zuzana Krizova

Abstract


Combinations of companies in the form of mergers lead to the concentration of capital accompanied by an increase in the value of assets as well as economic power; moreover, the ownership structure changes, new organizational systems and various projects in the personnel policy are created and developed, global company culture and company philosophy are born. This paper presents partial results of the Czech Science Foundation research project no. 403/11/0447, whose objectives are to identify the problems in merger preparation in compliance with valid Czech regulations and to analyse economic causes and consequences of mergers. The source of information is a basic dataset formed in the structure necessary for statistical analysis; the dataset was created by the project implementers. An empirical research has been conducted on the basic statistical file that contains information about all the companies in the Czech Republic, which merged in the last 10 years (2001–2010), and published in digital form financial statements in the collection of the Trade Register. We analyse temporal series reflecting the development of mergers in companies as divided by size and the role of the company in the merger process, measured by the number of mergers and volume of assets of the successor and the dissolved companies.

Our research has proven that the Czech economic environment is dominated by the combinations where a larger company devours the smaller one with the objective to achieve a more advantageous position in the market and economies of scale. A closer dependence was found for development trends in the cases when the dissolved companies were larger than the successor company than in opposite cases.

DOI: http://dx.doi.org/10.5755/j01.ee.25.2.4030


Keywords


company transformations; mergers and acquisitions; successor companies; acquired companies; macroeconomic environment; regression and correlation analysis

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Print ISSN: 1392-2785
Online ISSN: 2029-5839