Abstract
We analyse the abnormal returns to target shareholders in cross-border and
domestic acquisitions of UK companies. The cross-border effect during the bid
month is small (0.84%), although cross-border targets gain significantly more
than domestic targets during the months surrounding the bid. We find no evidence
for the level of abnormal returns in cross-border acquisitions to be associated with
market access or exchange rate effects, and only limited support for an international
diversification effect. However, the cross-border effect appears to be
associated with significant payment effects, and there is no significant residual
cross-border effect once various bid characteristics are controlled for.
domestic acquisitions of UK companies. The cross-border effect during the bid
month is small (0.84%), although cross-border targets gain significantly more
than domestic targets during the months surrounding the bid. We find no evidence
for the level of abnormal returns in cross-border acquisitions to be associated with
market access or exchange rate effects, and only limited support for an international
diversification effect. However, the cross-border effect appears to be
associated with significant payment effects, and there is no significant residual
cross-border effect once various bid characteristics are controlled for.
Original language | English |
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Pages (from-to) | 83–108 |
Journal | European Financial Management |
Volume | 10 |
Issue number | 1 |
DOIs | |
Publication status | Published - 2004 |
Keywords
- Mergers and Acquisitions
- Shareholder Returns
- Cross-Border
- Differential Wealth Effects