Cross-Border Acquisitions Targeting Chinese Firms – An Empirical Study of Acquirer Returns
(2012) FEKN90 20121Department of Business Administration
- Abstract
- The main purpose of this study is to investigate if U.S. firms´acquisition of Chinese firms and U.K. firms are value-enhancing for the U.S. acquirer. The secondary purpose is to investigate if the targets´ level of intangible assets has an impact on the return. We find that there exists a historical acquirer return, amounting to 314 basis points for U.S. firms acquiring Chinese targets and 136 basis points for U.S firms acquiring U.K. targets. These findings are both stated on a five percent statistical significance level. When evaluating the impact of intangible assets, we find no statistical significance. However, the negative relationship with Chinese targets, containing substantial intangible assets, point towards some value... (More)
- The main purpose of this study is to investigate if U.S. firms´acquisition of Chinese firms and U.K. firms are value-enhancing for the U.S. acquirer. The secondary purpose is to investigate if the targets´ level of intangible assets has an impact on the return. We find that there exists a historical acquirer return, amounting to 314 basis points for U.S. firms acquiring Chinese targets and 136 basis points for U.S firms acquiring U.K. targets. These findings are both stated on a five percent statistical significance level. When evaluating the impact of intangible assets, we find no statistical significance. However, the negative relationship with Chinese targets, containing substantial intangible assets, point towards some value destruction. This could indicate that transparency and political risk have a bigger impact on these firms. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/2542607
- author
- Sjöström, Maurits LU and Sinclair, Magnus LU
- supervisor
- organization
- course
- FEKN90 20121
- year
- 2012
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Cross-Border M&A, China, Intangible Assets, Event study and Cumulative Abnormal Returns (CAR)
- language
- English
- id
- 2542607
- date added to LUP
- 2012-07-02 12:30:32
- date last changed
- 2012-07-02 12:30:32
@misc{2542607, abstract = {{The main purpose of this study is to investigate if U.S. firms´acquisition of Chinese firms and U.K. firms are value-enhancing for the U.S. acquirer. The secondary purpose is to investigate if the targets´ level of intangible assets has an impact on the return. We find that there exists a historical acquirer return, amounting to 314 basis points for U.S. firms acquiring Chinese targets and 136 basis points for U.S firms acquiring U.K. targets. These findings are both stated on a five percent statistical significance level. When evaluating the impact of intangible assets, we find no statistical significance. However, the negative relationship with Chinese targets, containing substantial intangible assets, point towards some value destruction. This could indicate that transparency and political risk have a bigger impact on these firms.}}, author = {{Sjöström, Maurits and Sinclair, Magnus}}, language = {{eng}}, note = {{Student Paper}}, title = {{Cross-Border Acquisitions Targeting Chinese Firms – An Empirical Study of Acquirer Returns}}, year = {{2012}}, }