Supporting management decisions for M&A transactions based on the strategic allocation of intangible assets

Supporting management decisions for M&A transactions based on the strategic allocation of intangible assets

Článek Scopus

In the context of mergers and acquisitions (M&A), management decisions regarding asset allocation play a key role in determining the strategic value of intangible assets. This study investigates the allocation of such assets, particularly goodwill, in relation to enterprise value on balance sheets across global M&A transactions within the B2C sector from 2000 to 2021. Utilizing data from the Markables database, which includes 543 transactions, this study presents robust and quantile regression analyses to effectively address challenges arising from non-normally distributed data. The findings underscore a significant correlation between the strategic allocation of intangible assets, especially goodwill, and enterprise value, highlighting their essential role in reflecting future earning potential and growth prospects. Additionally, the study reveals specific factors, including transaction type (asset vs. share deals) and timing (transaction year), that influence these asset allocation decisions. These insights are critical for enhancing management decisions in valuation and strategic financial planning during M&A. By elucidating these dynamics, this paper significantly contributes to the literature on management accounting and corporate finance, offering a granular understanding of the valuation of intangible assets in business combinations.

In the context of mergers and acquisitions (M&A), management decisions regarding asset allocation play a key role in determining the strategic value of intangible assets. This study investigates the allocation of such assets, particularly goodwill, in relation to enterprise value on balance sheets across global M&A transactions within the B2C sector from 2000 to 2021. Utilizing data from the Markables database, which includes 543 transactions, this study presents robust and quantile regression analyses to effectively address challenges arising from non-normally distributed data. The findings underscore a significant correlation between the strategic allocation of intangible assets, especially goodwill, and enterprise value, highlighting their essential role in reflecting future earning potential and growth prospects. Additionally, the study reveals specific factors, including transaction type (asset vs. share deals) and timing (transaction year), that influence these asset allocation decisions. These insights are critical for enhancing management decisions in valuation and strategic financial planning during M&A. By elucidating these dynamics, this paper significantly contributes to the literature on management accounting and corporate finance, offering a granular understanding of the valuation of intangible assets in business combinations.

brand value, customer value, goodwill, purchase price allocation, sales multiple, M&

brand value, customer value, goodwill, purchase price allocation, sales multiple, M&

Giuseppe Sorrentino, Mario Situm, Yuliia Serpeninova, Milos Tumpach and Zuzana Juhaszova

07.06.2024

Problems and perspectives in management

22

2

Ukrajina

539

554

15

https://www.businessperspectives.org/index.php/journals/problems-and-perspectives-in-management/issue-455/supporting-management-decisions-for-m-a-transactions-based-on-the-strategic-allocation-of-intangible-assets