Successful Cross-border Acquisitions of Latin American Financial Institutions: Identifying Success Factors

C. Bülent Aybar, Wendy M. Jeffus and John C. Edmunds
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C. Bülent Aybar: C. Bülent Aybar, School of Business, Southern New Hampshire University, Nashua, NH. E-mail: c.aybar@snhu.edu
Wendy M. Jeffus: Wendy M. Jeffus, F.W. Olin Graduate School of Business, Babson College, MA. E-mail: wjeffus@babson.edu
John C. Edmunds: John C. Edmunds, F.W. Olin Graduate School of Business, MA. E-mail: edmunds@babson.edu

Global Journal of Emerging Market Economies, 2012, vol. 4, issue 3, 347-367

Abstract: This article examines the shareholder wealth effects for foreign companies that announce acquisitions of financial institutions in Latin America. We examine data for 636 transactions for the period 1985–2009. We employ event study methodology coupled with a cross-sectional regression to determine if shareholders of the acquiring firm receive positive returns. The results indicate that acquirers receive positive returns when the acquisition involves a target bank in a market with low market access, high market risk, and greater control post acquisition. These findings offer improvements on previously examined variables and provide insight into a market not sufficiently examined in prior research.

Keywords: Cross-border acquisitions; financial intermediaries; Latin American market (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:sae:emeeco:v:4:y:2012:i:3:p:347-367

DOI: 10.1177/0974910112459699

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