Is the merger worth it? Evaluating the effect of mergers of companies on their financial indicators via latent growth curve model (Pilot study)

Our paper represents a pilot analysis and contribution to the understanding of the successful implementation of mergers in the geographic context of Central Europe and offers a foundation for future research. The analysis is based on a robust and unique dataset of 783 companies that merged in the Czech Republic over the past decade, representing a substantial proportion of merging companies in the region during the period under review. The study utilises financial statements from the merging companies, covering the period from the decisive merger day - that is, before any effects of the merger could materialise and the five years following it. Unlike traditional studies that predominantly rely on univariate methods, this research employs a comprehensive approach to analysing longitudinal, cross-industry post-merger data via latent growth curve models. This combination of dataset size and analytical depth has not been explored in this context before in the Central European region.