A Managerial Perspective On The Romanian Merger Projects: Which Are The Triggers That Lead To A Business Concentration?

In the current economic environment, synergy has become a trend in business management, making it necessary to explore ways to evaluate it. In this context, three reasons for mergers and acquisitions are to be considered: the search for synergy, the management system and hubris. The mergers are strategic operations which have, as starting point, motivations which usually are related to the management of the involved companies. These motivations cover a wide range, from personal prestige to the expansion of the acquiring company. During our research, we identified a series of motivations, as following: the performance improvement of the target company; consolidation to eliminate de excess supply in a specific industry; accelerating market access to products/services offered/provided by the target company; getting skills or resources faster or cheaper than if they were created/produced; exploitation of an industry's expansion capacity; choosing an early-stage development company or a niche market. The sample for the study consists of 571 Romanian companies, involved in 245 mergers (2 mergers by consolidation and 243 mergers by absorption). For this, we will discuss the major triggers that led to mergers, in Romania, in year 2016, taking into account the two major theories: the value maximization theory and the managerial theory. In this context, we want to draw attention on the fact that the most mergers in Romania are motivated by the access to new markets and new resources, which appertain to the first theory. Also, we analyse the aforementioned sample taking into account the period of time between the incorporation of the companies and the date they decide to participate to a concentration and the type of merger they are involved in: horizontal (the entities have the same NACE code), vertical (the acquiring entities merged with a target in order to optimize the supply chain or to access a new distribution market) or conglomerate (the NACE codes of the two entities are different)