Iryna Honcharenko, Doctor of Economics, Professor of the Department of Public Management and Administration and International Economic, Mykolaiv National Agrarian University, Mykolaiv, Ukraine

ORCID ID: 0000-0001-9670-9812
e-mail: honcharenko@mnau.edu.ua

Olha Honcharenko, PhD student, Kyiv National Economic University named after Vadym Hetman Kyiv, Ukraine

ORCID ID: 0000-0002-6860-9862
e-mail: Honcharenko15olha@gmail.com

Features Of the Processes Of Mergers And Acquisitions In The Agro-Industrial Sector Of Ukraine’s Economy

Abstract. Introduction. The article considers mergers and acquisition deals that took place in the agro-industrial sector of Ukraine’s economy in 2018-2020 and assesses key trends in the rural development of the country. Territorially the biggest part of Ukraine is rural areas, thus it’s obvious that their development shall and may have significant influence on the development of the country, as a whole.

Purpose. The study was preceded by the following tasks: to describe and assess the main features of the processes of mergers and acquisitions in the agro-industrial sector of Ukraine’s economy in 2018-2020. The theoretical basis of the study was papers related to the processes of mergers and acquisitions, the development of rural areas. Methods of synthesis and analysis were used. Data and information from the InVenture Investment datatbase, as well as the State Statistics Service of Ukraine (SSSU), were analysed, including data on changes in employment and unemployment for 2018 – 2020 in Ukraine. The obtained data were processed descriptively by statistical analysis methods.

Results. According to the results of the analyses was find out that in the agro-industrial sector of Ukraine, the strategy of inorganic growth of enterprises (through the merger and acquisition deals) remains relevant and popular, the participants of the deals are mostly Ukrainian companies, and the subject in most cases is 100% stake in the company, however, foreign investors are also interested in the Ukrainian companies and find out Ukrainian economy, especially its agro sector, extremely interesting for investments.

Conclusions. Speaking about the potential influence of the M&A activity on the rural areas development lets look at the employment rate on such territories, as this is one of the most direct indicator of the people’s prosperity. Observations show that the employment of the population of rural areas of Ukraine is declining much faster than the urban population. The connection between the activity of the local enterprises in the M&A deals and the prosperity of the local community has no linear dependences. The list of references includes appropriate literature, which forms a good base for the performed research.

Keywords: M&A; rural areas; agricultural companies; Ukraine; development.

References:

1. Commity of Ukraine (2002). Regulations on the procedure for submitting applications to the Antimonopoly Committee of Ukraine for prior obtaining a permit for the concentration of economic entities (Regulations on Concentration), 33-r. Official Visnyk of Ukraine, 13 [in Ukrainian].
2. Balmann, A., Curtiss,, Gagalyuk, T., Lapa, V., Bondarenko, A., Kataria, K. & Schaft, F. (2013). Productivity and efficiency of ukrainian agricultural enterprises. Agriculture Policy Report (APD/APR/06/2013), German-Ukrainian Agropolitical Dialog, Kyiv, Ukraine [in Ukrainian].
3. Capron, L. & Mitchell, (1997). Outcomes of international telecommunications acquisitions: analysis of four cases with implications for acquisitions theory. European Management Journal, 15 (3), 237-251 [in English].
4. Chaddad, F. & Valentinov, (2017). Agency costs and organizational architecture of large corporate farms: evidence from Brazil. International Food and Agribusiness Management Review, 20(2), 201-220 [in English].
5. Gagalyuk, T. (2017). Project review: International Competence Center on large scale agriculture at the Leibniz Institute of Agricultural Development in Transition Economies. Journal of Applied Management and Investments, 6 (2), 147-150 [in Ukrainian].
6. Gagalyuk, T. & Valentinov, (2019). Agroholdings, turbulence, and resilience: the case of Ukraine. Journal of East European Management Studies, 24 (3), 484-496 [in Ukrainian].
7. Gagalyuk, T., Valentinov, V. & Schaft, F. (2018). The corporate social responsibility of Ukrainian agroholdings: the stakeholder approach revisited. Systemic Practice and Action Research, 31 (6), 675-698 [in Ukrainian].
8. Hermans, F. L. P., Chaddad, F. R., Gagalyuk, T., Senesi, S. & Balmann, A. (2017). The emergence and proliferation of agroholdings and mega farms in a global context. International Food and Agribusiness Management Review, 20 (2), 175-186 [in Ukrainian].
9. InVenture Database «M&A in Ukraine» (2022). Retrieved from https://inventure.com.ua/analytics/investments/rynok-manda-v-agrosektore-ukrainy-2021:-farming-v-favore-u-investorov [in Ukrainian].
10. Karim, S. & Capron, (2016). Reconfiguration: adding, redeploying, recombining and divesting resources and business units. Strategic Management Journal, 37 (13), 1-20 [in Ukrainian].
11. Kim, J. J., Haleblian, J. & Finkelstein, S. (2011). When firms are desperate to grow via acquisition: the effect of growth patterns and acquisition experience on acquisition premiums. Administrative Science Quarterly, 56 (1), 26-60 [in English].
12. Koester, U. (2005). A revival of large farms in eastern Europe – how important are institutions? Agricultural Economics, 32, 1, 103-113 [in English].
13. KPMG (2019). Ukrainian M&A review 2018. KPMG Ukraine. Kyiv, Ukraine. Retrieved from https://assets.kpmg/content/dam/kpmg/ua/pdf/2019/02/Ukrainian-MA-Review-report-2018-EN.pdf [in Ukrainian].
14. Mamonova, N. (2015). Resistance or adaptation? Ukrainian peasants’ responses to large-scale land acquisitions. The Journal of Peasant Studies, 42 (3-4), 607-634 [in Ukrainian].
15. Penrose, E. (1995). The theory of the growth of the firm, 2nd edition. Oxford University Press, New York, NY, USA [in English].
16. Petrick, M., Wandel, J.& Karsten, K. (2013). Rediscovering the virgin lands: agricultural investment and rural livelihoods in a Eurasian frontier area. World Development, 43, 164-179 [in English].
17. Porter, Е. М. (2005). Competitive Strategy: Methodology for Analyzing Industries and Competitors. М., Alpina Business Books [in English].
18. Ramezani, C. A., Soenen, L. A. & Jung, A. R. (2002). Growth, corporate profitability, and shareholder value creation. Financial Analysts Journal, 62 (6), 56-67 [in English].
19. Steigenberger, N. (2017). The challenge of integration: a review of the M&A integration literature. International Journal of Management Reviews, 19 (4), 408-431 [in English].
20. The Antimonopoly Committee of Ukraine (2019). Report of the Antimonopoly Committee of Ukraine for 2018 approved by the order of Antitrust Commity of Ukraine. Retrieved from http://www.amc.gov.ua/amku/doccatalog/ document?id=148160&schema=main [in Ukrainian].
21. The State Statistics Service of Ukraine (2021). Demographic and social statistics / Labor market / Employment and unemployment. Retrieved from http://www.ukrstat.gov.ua/operativ/operativ2017/rp/eans/eans_u/arch_znsmv_u.html [in Ukrainian].
22. Ukrainian Agribusiness Club (UCAB) (2021). Retrieved from http://ucab.ua/en/lfm_book [in Ukrainian].
23. Verkhovna Rada of Ukraine (2001). Law of Ukraine on protection of economic competition № 2210-III. Retrieved from https://zakon.rada.gov.ua/laws/show/2210-14 [in Ukrainian].
24. Weber, R. & Camerer, (2003). Cultural conflict and merger failure: an experimental approach. Management Science, 49 (4), 400-415 [in English].