Waves of mergers and acquistions and macroeconomic variables

Abstract

This paper aims to identify waves of mergers and acquisitions in the Brazilian market and to analyze the degree to which macroeconomic variables explain them. In methodological terms we used linear regressions in a Markov-Switching structure with quarterly data from the period between 2002-3Q and 2022-4Q. We conclude that the Brazilian market of mergers and acquisitions can also be considered as composed of waves and that it has a strong persistence of the regimes. Furthermore, the model fit well with the data, with the variable referring to the performance of the economy (GNP) and the one referring to the expectation of the stock market (Ibovespa) having the greatest explanatory power. The context of the study was an emerging market, lacking research on the subject, combined with the scarcity of objects and instruments. In practical terms, identifying waves is advantageous for companies to anticipate market movements or take advantage of business opportunities.