A humble question relates to post-merger analysis

Hi all,

I’m a fintech product manager who’s currently working on a post-merger analytical tool. And i read a lot of papers lately and the main methodology is to do regression analysis on financial ratios (eg, operating profit ratios, ROE, ROA, etc.) pre and post merger (sometimes 3 years before merger and 3 year after merger) to see whether there’s improvement on profitability and operation.

I can see this is a methodology widely accepted and used in many cases, but i feel like this is only applicable when the acquiring company only acquired a single company within a short period of time, so the pre and post- merger financial ratios can be indicative as there’s no interference. But if there are multiple acquisitions that take place within a short period of time, it will be hard to know which transaction actually contributes to the subsequent improvement (or otherwise deterioration) of those financial ratios, or the proportion of improvement (or deterioration) done by each transaction; and sometimes these mergers can be for different purposes. But in many real-life cases, it is fairly common to see this happen. So i’m here wanting to know whether there is a way to distinguish the subsequent contributions made by each transaction. Or is there any way to single out the difference mde by one particular merger or acquisition?


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Management may disclose specific contributions shortly after a transaction if it is material. After the first year I do not see it disclosed much other than on an aggregate basis. Your best bet would be to look at companies that created new reportable segments after an acquisition. 

yeah that’s what i meant- they are usually on an aggregate basis. well i guess if these acquisitions are for the same purpose, then it’s ok to investigate on an aggregate basis, otherwise id probably have to try to investigate different ratios based on their distinctive intentions.

But anyway, thanks mate :)