Cross-Border M&A Bidder Returns in the US

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School of Business | Bachelor's thesis
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Date
2022
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
24+4
Series
Abstract
This thesis studies the difference in acquirer stock returns between domestic and foreign targets. I use a sample of 22096 acquisitions by US acquirers from 2000 to 2020 and find acquirers experiencing worse announcement returns from foreign targets compared to domestic ones. After controlling for factors known to affect acquirer announcement returns, I find that the negative cross-border effect is not significant but rather explained by deal and company-specific factors. Furthermore, I study the determinants of acquirer returns within the cross-border sample and find the target country’s level of economic freedom to be positively related to acquirer announcement returns. I also analyze the acquirers’ long-term returns and find a negative cross-border effect for public targets. Finally, I test the target country characteristics’ effects on long-term returns and find no significant determinants.
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Thesis advisor
Kokkonen, Joni
Keywords
Acquisitions, Globalization, Bidder gains, Mergers
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