Cross Border Bidders Versus Domestic Ones

Ralf Bebenroth

Chapter 8 in International Business Mergers and Acquisitions in Japan, 2015, pp 107-122 from Springer

Abstract: Abstract This chapter investigates differences in targets overtaken by cross-border bidders versus domestic ones. The literature from the selection theory argues that there is “cherry picking.” That means, cross-border bidders overtake the comparably better performing targets in contrast to domestic bidders, which acquire weaker targets in a sort of “rescue mission.” Targets in the study were investigated to see if this statement holds true. The results show that cross-border targets did not perform better but performed worse than domestic ones. According to my sample, I have to conclude that there is no “cherry picking” of Japanese firms at Japanes firms at cross-border acquisitions. This lends support to the idea that foreign bidders probably come to the acquisition target at a later stage. To put it differently, Japanese firms get overtaken by foreign bidders in case where no domestic firm is interested in overtaking the target. Reasons are discussed.

Keywords: Foreign Direct Investment; Financial Performance; Foreign Investor; Foreign Firm; Japanese Firm (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-4-431-54989-5_8

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DOI: 10.1007/978-4-431-54989-5_8

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