Tax Implications in M&A and LBO transactions

This thesis explores how taxation influences mergers, acquisitions, and leveraged buyouts, combining a case study with an empirical study. The case study illustrates the potential of the interest tax shield, while also showing its fragility once default probabilities and fiscal constraints are accounted for. The empirical analysis provides consistent evidence that fiscal variables leave a measurable imprint on deal pricing. Deferred tax assets and tax shields are positively associated with transaction values, whereas higher effective tax rates correlate with lower valuations. Overall, the findings suggest that although taxes are rarely the primary driver of corporate transactions, they systematically shape their valuation and structure, offering clear implications for both deal modeling and negotiation.