Cross-border mergers and the cross-border effect: the case of the automotive supply industry
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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).
KeywordsAutomotive supply industry Cross-border acquisitions Bidder gains Global diversification
JEL ClassificationF21 F23 G14 G34 L62
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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