Value creation in European M&As

Jose Campa and Ignacio Hernando

No D/471, IESE Research Papers from IESE Business School

Abstract: This paper looks at the value generated to shareholders by the announcement of mergers and acquisitions involving firms in the European Union. Target firm shareholders receive on average a statistically significant excess return of 9%. Acquirers' excess returns are null on average. Excess returns differ significantly depending on whether the merger involves two firms from the same European country or is a cross-border transaction. Cross-border transactions generate less total value than national mergers. Furthermore, when a cross-border merger occurs in an industry in which governments historically have been actively involved, the transaction results in a net destruction of value to shareholders.

Keywords: Cross-border mergers; shareholder returns; value creation; regulation (search for similar items in EconPapers)
JEL-codes: G28 M10 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2002-10-10
New Economics Papers: this item is included in nep-eec
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Citations: View citations in EconPapers (4)

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Working Paper: Value creation in European M&As (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-0471

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