Mergers and acquisitions: assessing economic efficiency

The paper considers the methodical approaches to the assessment of how efficient the transactions of merger and acquisition are in the commercial and social aspects and what such transactions mean to national and regional economies. Applying the model offered by R. Merton for the optional assessment of value equity, the author presents a comparative analysis of the horizontal and conglomerate mergers, and analyses the conflicts of interests between companies’ managers, owners and creditors. From the point of view of national and regional efficiency, the paper researches how to find a balance between operating synergy and the higher power of such consolidated company in the market. The latter contributes to the higher prices and a lower consumer surplus. The paper also describes the factors defining benefits from and costs of the transactions of merger and acquisition for the national economy and different regions.