This work investigates company performance measurement in case of a merger by applying a composite indicator for measuring company performance from economic and environmental perspectives.
The recent merger between Motor Vehicle Manufacturers (MVMs) Peugeot Société Anonyme (PSA) and Fiat Chrysler Automobiles (FCA) has drawn attention due to its potential positive impact on company performance. The aim of this research is to contribute to the existing knowledge by adding value to the field of company performance measurement in the context of mergers.
To achieve this goal, the current situation regarding the merger between automotive companies PSA and FCA was investigated and the state-of-the-art in composite indicators for measuring company performance and merger performance measurement was presented.
Furthermore, the relevance of adding Market Capitalization as independent variable to the comprehensive set of measures of the composite indicator for company performance of motor vehicle manufacturers (I_MVM) was investigated. The I_MVM was extended to assess both historic and future company performance for a hypothetical market of motor vehicle manufacturers in the case that two of these motor vehicle manufacturers were fictitiously merged into one company.
A case study focusing on the merger between PSA and FCA is conducted according to the methodology of theory-testing research. The application of the extended model I_MVMMC provides valuable insights into merger performance.
Moreover, a method for measuring future merger performance was designed. This method provides a framework to evaluate the potential success of mergers and an index quantified this potential. The results showed the potential of value through growth and the potential of the merger between PSA and FCA.