The Determinants of Ownership in M&As: An Analysis of the Stake Purchases in Romanian Acquisitions

Research question: The study aims to identify the microeconomic factors that influence the amount of stake purchased in Romanian acquisitions. Motivation: Romania is a market with potential and one of the fastest growing economies in the European Union, facts that make Romanian companies appealing for this type of restructuring transactions. Thus, Romanian companies participate in acquisitions, being either in the position of acquirers or target entities (in most cases). We want to identify if the purchased stake is significantly influenced by a series of factors, related to both involved companies. Idea: The decision of an acquirer to purchase a stake in a target company depends on both its characteristics and the ones of the target company which meets its needs. Considering this assumption, we use a series of financial and nominal factors, which are related to both companies involved (productivity and workforce ratios, the relatedness between the activities of the companies involved and the national/international dimension on the investment), to estimate how much they influence the purchased stake in Romanian acquisitions. Data: The study is based on a sample of 192 acquisitions, with one target and one acquirer, in which a Romanian company was involved, for 2010-2017 period of time. Out of these, 130 transactions are industry acquisitions and 62 transactions are services acquisitions. Tools: We use linear regression, crosstabulation and ANOVA. Findings: Using a mediation model, the results will show that the workforce ratio, the productivity ratio and the relatedness of the two companies have a significantly influence in the percentage purchased in the target company, but the national/international side of the M&As lead to an increase in the capacity of the proposed models to predict the variance of the final investment. The results are controlled for industry and services, considering the NACE main section of the target company. Contribution: Our findings contribute to the scarce literature on Romanian acquisitions, providing information regarding the influence factors on the purchased stake in acquisitions.