Gerenciamento de resultados em fusões e aquisições (F&A) de empresas de capital aberto no Brasil

Abstract

International empirical evidence shows that the managers of acquiring companies and target companies may use Earnings Management (EM) practices to influence profits in the periods leading up to Mergers and Acquisitions (M&A). These practices can be intensified depending on the payment method adopted in the transaction, with the aim of influencing the market valuation of shares and thus reducing the cost of the deal. However, the use of EM by both parties involved can lead to the abandonment of negotiations or compromise the performance of acquiring firms in cases where the deal is completed. To investigate this phenomenon in the Brazilian context, this thesis is structured into three articles. The first article explores the relationship between EM practices and the payment methods used in M&A, cash, shares, or a combination of both, based on the assumption that the choice of payment method serves as a signal to the market. Additionally, it examines whether there is a reversal of EM practices by acquiring companies that used shares, wholly or partially, as a means of payment. The results suggest that GRR practices carried out in the period preceding the M&A do not affect the likelihood of acquiring firms using their own shares to complete the transaction. On the other hand, GRA practices positively influence the probability of acquiring firms opting to use cash to settle the M&A. The findings also show that companies that use their shares as payment for the M&A do not exhibit a significant reversal of accruals in the post-M&A period compared to companies that paid solely in cash, whether in quarterly or annual analyses. This suggests that, regardless of the type of payment, cash or shares, these practices remain similar. Conversely, companies that used shares for payment exhibit a significant reversal of GRR practices in the year following the M&A, compared to those that used only cash. The second article, based on the premise that M&A aim to generate synergies, investigates the impact of EM practices on the performance of acquiring companies after the deal. The results showed that the average economic performance of acquiring firms following M&A, represented by indicators such as ROA, ROIC, MB and GA, declined compared to the year before the transaction. Similarly, average market performance, measured by MTB, QT and RET indicators, also dropped in the year after the M&A. The reduction in these economic and market performance metrics was statistically significant, suggesting that the expected synergy gains, both economic and market based, did not materialize in the first year after the transaction. Furthermore, it was found that economic performance, as measured by indicators like ROA, MB, ML, and GA, was negatively impacted by AEM practices adopted before the M&A. As for REM, a negative effect on ROA was observed between one and two years after the transaction, compared to the year prior to its completion. On the other hand, none of the EM practices analyzed showed a significant influence on the market performance of acquiring firms in the post-M&A period. Finally, the third article, based on Information Theory, aimed to identify the factors that explain the probability of withdrawal from these transactions in Brazil. The results showed that earnings management practices, both through accruals and real activities, do not affect this probability, regardless of the form of payment. Similarly, the time taken to complete the transaction, whether the target company is a subsidiary of the acquirer, the acquirer’s prior M&A experience, stock market valuation, and economic policy uncertainty in the country also do not impact the completion of the deal. In contrast, the form of payment, whether the target company is publicly traded, and the country’s level of economic development significantly influence the likelihood of M&A withdrawal. These findings offer valuable theoretical insights. Earnings management practices increase the probability of companies using cash as a form of payment, suggesting that accounting signals may be aimed more at creditors, seeking better financing conditions, than at the capital market. As for the reversal of earnings management practices, especially those related to accruals, it is possible that managers avoid making this reversal evident in the post-M&A period, since such practices are easier to detect and a subsequent reversal could be interpreted as opportunistic behavior, in line with Agency Theory. Moreover, the findings of negative economic performance following M&A transactions support previousevidence and may be related to difficulties in generating the expected synergies, also explained by Agency Theory. This opens the door for future research to analyze the motivation behind M&As in Brazil through the lens of the hubris effect. Finally, although earnings management practices did not significantly influence the market performance metrics considered in this thesis, future studies could explore whether the Brazilian capital market adjusts stock prices in response to the perception of earnings management practices, in light of the Efficient Market Theory.