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Review of Economic Perspectives

Národohospodárský obzor; The Journal of Masaryk University

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Volume 16, Issue 4 (Dec 2016)


Efficiency of Mergers of Mechanical Engineering Companies in the Czech Republic

Mária Režňáková
  • Brno University of Technology, Faculty of Business and Management, Institute of Finances, Kolejní 2906/4,612 00 Brno, Czechia
  • Email:
/ Jan Pěta
  • Corresponding author
  • Brno University of Technology, Faculty of Business and Management, Institute of Finances, Kolejní 2906/4,612 00 Brno, Czechia
  • Email:
Published Online: 2016-12-17 | DOI: https://doi.org/10.1515/revecp-2016-0020


This paper presents the research results in the field of the efficiency of mergers and acquisitions in the mechanical engineering industry of the Czech Republic. The aim of this paper is to determine whether mergers taking place in mechanical engineering are successful, or possibly to identify factors which may be deemed as synergies sources. In our research, the success rate of mergers is identified on the basis of the increasing revenues and operating profit. It has been established that out of mergers completed in 2004 - 2011, success has been achieved in approximately half of them. For this reason, we have focused on identifying the factors which may serve as the reasons for such a difference. The selected indicators of the cost-to-revenue ratio and utilization of fixed assets, investments, and net working capital we analysed before and after the mergers in both groups of successful and unsuccessful mergers. The Mann-Whitney U test was used to test the results. The research results have demonstrated that synergies are not achieved due to the change in the market power of the merged companied but owing to operational efficiency which is reflected in a drop in labour costs and depreciation to revenues ratios and increasing asset utilization.

Keywords: Cost efficiency; Investment in fixed assets and net working capital; Mann- Whitney U test; Mergers in mechanical engineering; Operating synergies


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About the article

Received: 2016-09-30

Accepted: 2016-11-08

Published Online: 2016-12-17

Published in Print: 2016-12-01

Citation Information: Review of Economic Perspectives, ISSN (Online) 1804-1663, DOI: https://doi.org/10.1515/revecp-2016-0020. Export Citation

© by Jan Pěta. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License. (CC BY-NC-ND 4.0)

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