Target company cross-border effects in acquisitions into the UK

Danbolt, J. (2004) Target company cross-border effects in acquisitions into the UK. European Financial Management, 10(1), pp. 83-108. (doi: 10.1111/j.1468-036X.2004.00241.x)

Abstract

We analyse the abnormal returns to target shareholders in crossborder and domestic acquisitions of UK companies. The crossborder effect during the bid month is small (0.84%), although crossborder targets gain significantly more than domestic targets during the months surrounding the bid. We find no evidence for the level of abnormal returns in crossborder acquisitions to be associated with market access or exchange rate effects, and only limited support for an international diversification effect. However, the crossborder effect appears to be associated with significant payment effects, and there is no significant residual crossborder effect once various bid characteristics are controlled for.

• Item Type: Articles
• Additional Information: Copyright © Blackwell. The definitive version is available at www.blackwell-synergy.com
• Keywords: Mergers and acquisitions, shareholder returns, cross-border, differential wealth returns.
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Danbolt, Prof Jo
• Authors: Danbolt, J.
• Subjects: H Social Sciences > HB Economic Theory
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: European Financial Management
• Publisher: Blackwell
• ISSN: 1354-7798
• Copyright Holders: Copyright © 2004 Blackwell
• First Published: First published in European Financial Market 10(1):83-108
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher.