A Complex Algorithm for Selecting Instruments to Finance Mergers and Acquisitions

摘要

The study suggests formalized algorithm that allows to make an informed choice of instruments for financing M&A transactions. This algorithm includes following several stages: identification of the limiting factor; determination of the anticipated structure of settlements for the M&A transaction; formation of a financial instruments parameters set to use for the instruments' comparison; determination of specific weights of the selected parameters of the M&A financial instruments; identification of "preferable" values of financial instruments' parameters; comparison of the "preferred" financial instruments parameters with their actual or potentially possible parameters; making choice of the instruments for financing the M&A transaction. Approbation of the algorithm is done using the example of JSC "Agrofirma Volga", acting as a buyer company, and JSC "Zorinskoye", acting as a target company.