FINANCIAL CONTROLLING OF THE MERGER AND ACQUISITION PROCESS IN THE CONTEXT OF GEOPOLITICAL RISKS

Abstract

Introduction. Geopolitical risks and crises have become a significant factor affecting financial and investment decisions. Military actions, pandemics, climate change, supply chain disruptions, and social upheavals have become drivers of uncertainty, leading to unpredictable volatility in global markets. This necessitates a reevaluation of traditional tools for supporting financial and investment decisions, including decisions regarding mergers and acquisitions (M&A transactions). Problem Statement. The problem lies in the insufficient adaptation of traditional decision-support tools for M&A to the new geopolitical reality, characterized by permanent crises, supply chain disruptions, and increased levels of uncertainty. Purpose. To determine the nature of the impact of geopolitical risks and behavioral factors on investment decision-making and to substantiate the concept of financial controlling in M&A. Methods. A mixed-method approach (Mixed Methods Research) was employed, whereby hypotheses were formulated based on inductive observations and then deductively tested. Within this framework, both qualitative and quantitative research methods were applied, including content analysis, abstract-logical and synthesis methods, regression-correlation analysis, and the online survey method (CAWI – Computer Assisted Web Interviewing). Results. The nature of the impact of geopolitical risks on the dynamics of the merger and acquisition market has been clarified. Based on empirical analysis, the influence of the subjective, behavioral component on investment decision-making as a whole and decisions regarding mergers and acquisitions in particular has been confirmed. For the first time, the concept of financial controlling in M&A has been substantiated, aimed at providing informational, methodological, and analytical support for relevant decisions. The essence of the ecosystem approach to the process of mergers and acquisitions has been revealed. Conclusions. It has been proven that geopolitical risks are insufficiently taken into account in the process of making investment decisions regarding M&A, which often leads to unsuccessful deals. This is a consequence of the shortcomings of existing company valuation and rating methodologies, as well as the influence of the subjective, behavioral component on investment decision-making. To address the complex issues associated with M&A, it is advisable to implement a comprehensive concept of financial controlling and an ecosystem approach to the merger and acquisition process.