The long-run performance of cross-border acquirers: An analysis of synergy sources

Junming Hsu, Tung-Hsiao Yang and Yi-Chi Tsai

Journal of Multinational Financial Management, 2021, vol. 60, issue C

Abstract: This study examines the long-run stock performance of US firms conducting cross-border mergers and acquisitions and explores possible synergy sources by investigating three sets of factors: country differences, merger characteristics, and acquirers' operational variables. The results show that US cross-border acquirers underperform in the long run, a situation that does not significantly change according to country differences. Acquisitions of horizontal and private targets outperform those of non-horizontal and public targets, respectively, but underperform their non-acquiring matching firms. By contrast, acquirers with post-merger decreases in costs of goods sold (CGS) outperform their acquiring peers and non-acquiring matching sample. These results suggest that cross-border acquirers need to select targets that can drive down CGS and be cautious of merging non-horizontal and public firms, in order to create synergy gains and avoid value destruction.

Keywords: Cross-border mergers and acquisitions; Long-run performance; Synergy sources; Private targets (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:60:y:2021:i:c:s1042444x21000189

DOI: 10.1016/j.mulfin.2021.100694

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