Do cross border and domestic acquisitions differ? Evidence from the acquisition of UK targets

Alan Gregory and Sheila O'Donohoe

International Review of Financial Analysis, 2014, vol. 31, issue C, 61-69

Abstract: We investigate the determinants of short term wealth effects for both public acquiring and target shareholders following the announcement of UK acquisitions over the period 1990–2005. Regardless of their nationality, overall acquirers incur losses, with domestic acquirers’ under-performing cross-border acquirers in general. For the latter no differences in returns between regions are found once the differences in corporate governance regimes are controlled for. Instead it is firm characteristics and in particular firm leverage that largely explain acquirers' returns. All targets gain significantly but the higher returns associated with international deals disappear once bid characteristics are controlled for.

Keywords: Domestic acquirers; Cross border acquirers; UK targets; Gearing; Corporate governance regime (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:31:y:2014:i:c:p:61-69

DOI: 10.1016/j.irfa.2013.09.001

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