PREDICTING CORPORATE MERGERS AND ACQUISITIONS: THE CASE OF TURKEY

Abstract

This study examines the financial variables that predict the merger and acquisition targets in Turkey. Cox regression with segmented time-dependent covariates is used to determine the factors that predict target companies for mergers and acquisitions. The firms that are analyzed are among the top 500 industrial enterprises in Turkey. We find that a lower pretax profit margin is associated with an increased chance of being a merger or an acquisition target. In addition, the lower the debt ratio, the more likely that the firm will be a target for a merger or an acquisition.