EVALUATION OF INTEGRATION OF BUSINESS ENTITIES

Abstract

At present, such form of doing business as an integrated structure has come into widespread acceptance
in the industrial sector of economics. According to specialists this integrated structure enable the companies,
which conducted their activities in the form of mono-structures, to gain a number of competitive advantages
by reducing transaction costs, economies of production scale, building their own distribution networks, getting
a more favorable access to raw materials, etc. In the modern literature there is a problem of assessing the
economic efficiency of the integrated structures after the merger and acquisition deal. Most economists are
paying attention to the efficiency only at the stage of making a decision on the possibility of integration.
They almost do not pay enough attention to assessing the achievement of the objectives, stated at the stage of
planning, after the fact of integration. The article focuses on solving the problem of assessing the effectiveness
of the integrated structure after the merger and acquisition deal. The content of synergistic effect is revealed.
Its application concerning the description of the effectiveness of the integrated structures is substantiated.
The author suggests a methodological approach to the assessment of the effectiveness of the integrated
structures after the merger and acquisition deal, which is based on the assumption of a possibility of comparing
actual and predicted values characterizing the efficiency of business units that make up the structure. As
the calculated value it’s recommended to use the EBITDA indicator, which allows you to compare the activities
of several business entities in time, excluding such factors as differences in depreciation policy, the possibility of granting tax exemptions and the use of different tax regimes, the differentiated approach of

financial and credit institutions in the implementation of lending policies. The article also shows restrictions
and availability of using the developed approach for evaluation of the effectiveness of the integration of economic
entities. The logical and structural conclusion, which enable one to understand the characteristics and
purpose of the proposed methodological approach for top management of the integrated structure, as well as
for all interested users.