Growth through Acquisition? An Empirical Analysis of Post–M&A Value Creation in Small European Firms

The thesis looks into how mergers and acquisitions (M&A) affect small companies in Europe over the medium and long term. For the study, small firms are classified as those with a market value below €50 million four weeks before they undergo an M&A deal. The data includes deals completed from January 2010 to December 2024. By analyzing this data using econometric methods, the goal is to understand whether these transactions generate real economic value for the companies involved, especially when compared to similar firms that did not undertake any M&A. The methodology used for the research involves the measurement of key financial indicators like EBITDA margin, Net Profit Margin, and Debt Ratio. It also involves a technique called propensity score matching (PSM) to select comparable firms that didn’t acquire anyone, creating a control group. Then, it measures how the companies perform after the deal using Difference-in-Differences (DiD) regressions. The analysis also breaks down results by industry to recognize sector-specific factors. By comparing the post-M&A performance to both the matched control firms and industry averages, this study offers some insights into when and how M&A can be a useful strategy for small firms to grow. The findings could have implications for entrepreneurs, financial advisors, and policy makers in understanding how the size, timing, and industry context might influence value creation in SME M&A.