Recent merger and acquisition deals in Maltese listed companies : an analysis

Abstract

Purpose: The purpose of this study is to analyse the M&A process undertaken by listed acquirers. This study further aims to assess the effectiveness of M&As in reaching their original objectives and also to evaluate whether the M&As had any discernable effects on the financial performance of the acquiring companies. Design: The objectives of this study were attained by means of eleven personal semi-structured interviews held with representatives from involved acquirers, stock brokers and published sources of information. Findings: This study ascertained that in the majority of acquisition cases, acquiring companies did not have an 'acquisition strategy' to look for potential targets. Rather, they used acquisitions to react towards arising opportunities. A number of weaknesses in the M&A process undertaken by involved companies were also identified. The effectiveness of acquisitions varied considerably between the ratings provided by acquirers and stock brokers, with the latter being more conservative. It was found that acquisitions had only little-to-moderate impact on the financial performance of acquirers, mainly owing to their relative small size. Conclusion: This study concludes that while each acquisition case was unique in its own aspects, one common thread in all acquisitions was the characteristics of the Maltese market. Owing to its small size and the large number of family owned Maltese businesses, the number of available targets was restricted. Furthermore, most MSE listed companies preferred to build their own structures rather than to have to adjust to working practices of others. Value: It is expected that this study will be of use to Maltese practitioners when assisting acquirers in M&A and also to those potential Maltese acquir This study sheds light on the M&A scenario in MSE listed companies and the underlying reasons to the current M&A levels.