Value Creation through Cross-Border Mergers and Acquisition - An Empirical Study on UK Acquirers of BRIC Targets
(2010)Department of Business Administration
- Abstract
- This paper analyzes corporate geographic diversification in an attempt to establish if crossborder
deals involving UK acquirers on BRIC targets over the period 1997-01-01 to 2010-04-
15 are value-enhancing for acquirers and to identify the variables that influence the result.
Our findings suggest that acquisitions of BRIC targets by UK based firms are on average,
value enhancing at the 5% significance level. Factors that contribute to value creation are
acquirer’s excess cash, a combined method of payment, a high market-to-book ratio and
corporate control. Factors that contribute to value destruction are horizontal deals, the size of
the deal, the strength of the bidder’s currency and the cultural difference between the merging
firms’... (More) - This paper analyzes corporate geographic diversification in an attempt to establish if crossborder
deals involving UK acquirers on BRIC targets over the period 1997-01-01 to 2010-04-
15 are value-enhancing for acquirers and to identify the variables that influence the result.
Our findings suggest that acquisitions of BRIC targets by UK based firms are on average,
value enhancing at the 5% significance level. Factors that contribute to value creation are
acquirer’s excess cash, a combined method of payment, a high market-to-book ratio and
corporate control. Factors that contribute to value destruction are horizontal deals, the size of
the deal, the strength of the bidder’s currency and the cultural difference between the merging
firms’ countries. However, our results with respect to determining the explanatory variables
of value creation are statistically insignificant which implies that we cannot make any firm
and concrete conclusions. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1625344
- author
- Stephen Dorai, Jeremiah and Patolahti, Lauri
- supervisor
- organization
- year
- 2010
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Cross-Border, Mergers and Acquisitions (M&A), Brazil-Russia-India-China (BRIC), Event Study and Cumulative Abnormal Returns (CAR), Management of enterprises, Företagsledning, management
- language
- Swedish
- id
- 1625344
- date added to LUP
- 2010-06-07 00:00:00
- date last changed
- 2012-04-02 18:07:09
@misc{1625344,
abstract = {{This paper analyzes corporate geographic diversification in an attempt to establish if crossborder
deals involving UK acquirers on BRIC targets over the period 1997-01-01 to 2010-04-
15 are value-enhancing for acquirers and to identify the variables that influence the result.
Our findings suggest that acquisitions of BRIC targets by UK based firms are on average,
value enhancing at the 5% significance level. Factors that contribute to value creation are
acquirer’s excess cash, a combined method of payment, a high market-to-book ratio and
corporate control. Factors that contribute to value destruction are horizontal deals, the size of
the deal, the strength of the bidder’s currency and the cultural difference between the merging
firms’ countries. However, our results with respect to determining the explanatory variables
of value creation are statistically insignificant which implies that we cannot make any firm
and concrete conclusions.}},
author = {{Stephen Dorai, Jeremiah and Patolahti, Lauri}},
language = {{swe}},
note = {{Student Paper}},
title = {{Value Creation through Cross-Border Mergers and Acquisition - An Empirical Study on UK Acquirers of BRIC Targets}},
year = {{2010}},
}