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Review of Managerial Science

, Volume 2, Issue 3, pp 199–218 | Cite as

Cross-border mergers and the cross-border effect: the case of the automotive supply industry

  • Markus Mentz
  • Dirk SchiereckEmail author
Original Paper

Abstract

In this paper we examine stock price reactions to cross-border mergers and acquisitions in a particular industry, the automotive supply industry. We show that cross-border transactions entail a pronounced value creation for the acquiring shareholders and that this value creation also holds for transcontinental transactions, which to our knowledge have not been investigated so far. Splitting the sample by different types of targets indicates that the value creation mainly stems from takeovers of subsidiaries. By examining differences between national and international takeovers in cross-section, we sustain the recent evidence of a negative cross-border effect (i.e., cross-border mergers and acquisitions entail lower announcement returns than national ones).

Keywords

Automotive supply industry Cross-border acquisitions Bidder gains Global diversification 

JEL Classification

F21 F23 G14 G34 L62 

Notes

Acknowledgments

We are grateful to Martin Ahnefeld, Manuel Breidenbach, Benjamin Kleidt, Timo Gebken, and Martha Uenishi for their helpful comments and suggestions on earlier drafts of this paper.

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Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  1. 1.European Business School, Schloss ReichartshausenOestrich-WinkelGermany
  2. 2.TU Darmstadt, Institute of Business AdministrationDarmstadtGermany

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