Unraveling the Dynamics of Cross-Border Mergers and Acquisitions: Motivations and Performance Implications

Ching-Chih Wu, Tsung-Yi Liu and Tung-Hsiao Yang

SAGE Open, 2025, vol. 15, issue 2, 21582440251338684

Abstract: This study examines US cross-border mergers and acquisitions (M&As) from 1990 to 2014, analyzing acquirer motivations and their long-term market performance implications. Diverging from previous research, it investigates how pre-merger driving factors impact post-merger synergies. Lower book-to-market ratios and higher debt ratios signal aggressive and leveraged expansion strategies. Profitable firms with high asset turnover and institutional ownership exhibit greater motivation for takeovers. Post-M&A, larger acquirers with higher dividend payouts, profitability, conservative management, and operational efficiency achieve superior long-term returns. Corporate governance factors play a role, with increased institutional ownership enhancing long-term performance, while high ownership concentration among the top shareholders hinders it. The study provides insights into the motivations and long-term implications of cross-border M&As by examining the impact of pre-merger factors on post-merger synergies. JEL Classification: G34

Keywords: mergers and acquisitions; corporate governance; synergy; long-term performance; cross-border M&As (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:15:y:2025:i:2:p:21582440251338684

DOI: 10.1177/21582440251338684

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