| The purpose of this quantitative, longitudinal econometric study is to investigate the effects of global mergers and acquisitions on U.S. corporations' profitability, while controlling other factors such as management decisions, organizational culture, and economic climate, integration of operations, government regulations, debt level, and size. The intention was to observe the trends of 38 U.S. companies publicly traded on the New York Stock Exchange that merged with or acquired a total 51 international companies between 2008 and 2011. Several linear regression models were used to test and observe relationships between profitability ratios and independent variables 3 years before and 3 years after the M&A transactions. Findings suggest that the relative size of the target company to the acquiring company had a significant (p-value < 0.05) positive effect on total return on assets and debt level had a significant negative effect total return on assets for public U.S. companies that engaged in global mergers or acquisitions. In addition, there were no significant effects observed for return on total equity. |
