Do cross border and domestic acquisitions differ? Evidence from the acquisition of UK targets
International Review of Financial Analysis
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18 month embargo to comply with publisher's policy agreement with HEFCE
We investigate the determinants of short term wealth effects for both public acquiring and target shareholders following the announcement of UK acquisitions over the period 1990-2005. Regardless of their nationality, overall acquirers incur losses, with domestic acquirers' under-performing cross-border acquirers in general. For the latter no differences in returns between regions are found once the differences in corporate governance regimes are controlled for. Instead it is firm characteristics and in particular firm leverage that largely explain acquirers' returns. All targets gain significantly but the higher returns associated with international deals disappear once bid characteristics are controlled for. © 2013 Elsevier Inc.
NOTICE: this is the author’s version of a work that was accepted for publication in International Review of Financial Analysis. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Review of Financial Analysis, Vol. 31, pp. 61 – 69 doi: 10.1016/j.irfa.2013.09.001
Vol. 31, pp. 61 - 69