What drives post-acquisition farm growth? Empirical evidence from Ukraine

This study contributes tothe limited body ofresearch onmergers and acquisitions inprimary agriculture byexamining how large corporate agroholdings achieve profitable post-acquisition growth for the farms they acquire. Using System GMM estimation, weanalyse farm-level data from 648 farms acquired byagroholdings inUkraine between 2005 and 2016. Our findings show that agroholdings facilitate post-acquisition growth and performance improvements byemploying several integration strategies. Specifically, they leverage horizontally integrated structures to: (i)consolidate land resources ofacquired farms toachieve scale economies; (ii)reallocate farm resources toward more profitable production lines; and (iii)intensify production on acquired farms. These results support established firm growth theories, namely, the independence of firm growth rates from firm size (Gibrat's law) and the existence of Penrosean limits to growth.