The financial and operational performances after horizontal M&A: Empirical analysis

In this paper, we examine the changes of the firm's financial and operational performances after horizontal M&A, and further analyze the role of the operational performance, from the perspective of supply chain integration. Through the collection of 523 M&A samples from 2005 to 2013, we match the firms' performances of one year before, one year after and two years after the completion of the merger. After excluding the influence of the industry, we conduct Wilcoxon signed-rank test to analyze the changes, and the results indicate that the financial and operational performances after the horizontal M&A are significantly lower than those of the previous year. What's more, by matching the corresponding samples of non-M&A, multiple regression analyses show that the horizontal M&A and the operational performance have a significant interaction role in the influence of the firm's financial performance. Specifically, the operational performance seems to assume the role of “amplifier” to enhance the horizontal M&A's relationship with the firm's financial performance.