Purpose The aim of this study is to perform an empirical literature review (meta regression analysis) to identify the factors that contribute to synergies in mergers and acquisitions, examine publication bias, and explore heterogeneity across existing studies. Design/methodology/approach This study uses meta regression analysis, utilizing 375 t-statistics from 38 empirical studies. We assess potential publication bias and explore the sources of heterogeneity in the findings across these studies. Findings The FAT-PET test results show no publication bias in the literature. Revenue ratio, leverage, asset size, and Q ratio significantly impact synergy, while the acquirer's liquidity amplifies synergy. Most regulatory variables have no effect on synergy. The payment method used in deals (cash or equity) is crucial in explaining synergies. Past studies have mainly focused on industry relatedness, target type and acquisition type (hostile or friendly). Research limitations/implications Financial drivers like leverage, profitability and the Q-ratio, along with market returns and liquidity, play a significant role in synergy realization. Regulatory variables appear less influential, challenging traditional regulatory-based theories. Larger firms with more assets experience higher post-merger profitability, supporting resource-based theories. Practically, firms should focus on liquidity management, leverage decisions and asset size when planning M&As. Strategic alignment in target selection, payment method (cash vs. equity) and operational integration are also crucial for maximizing synergy outcomes. Originality/value To the author's knowledge, this research is the first empirical meta regression analysis conducted in the field of mergers and acquisitions.
Kalsie et al. (Tue,) studied this question.