Shareholder Wealth Effect of Cross-border Acquisitions: Evidence from the Nordics

Abstract

This study examines the short-term wealth effects of 1804 domestic and cross-border acquisitions of the Nordic companies during the years 2002-2017. The aim of the study is to find out how the acquirer announcement returns are affected by the origin of the target company. I apply traditional event study methods and cross-sectional regression to analyze whether the announcement returns earned by Nordic acquirers are different between cross-border and domestic acquisitions. Consistent with the recent research on the European market, Nordic acquirers earn approximately 0.89% lower announcement returns around the announcement day in cross-border acquisitions compared to domestic acquisitions.