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Successful Cross-border Acquisitions of Latin American Financial Institutions: Identifying Success Factors

Author

Listed:
  • C. Bülent Aybar

    (C. Bülent Aybar, School of Business, Southern New Hampshire University, Nashua, NH. E-mail: c.aybar@snhu.edu)

  • Wendy M. Jeffus

    (Wendy M. Jeffus, F.W. Olin Graduate School of Business, Babson College, MA. E-mail: wjeffus@babson.edu)

  • John C. Edmunds

    (John C. Edmunds, F.W. Olin Graduate School of Business, MA. E-mail: edmunds@babson.edu)

Abstract

This article examines the shareholder wealth effects for foreign companies that announce acquisitions of financial institutions in Latin America. We examine data for 636 transactions for the period 1985–2009. We employ event study methodology coupled with a cross-sectional regression to determine if shareholders of the acquiring firm receive positive returns. The results indicate that acquirers receive positive returns when the acquisition involves a target bank in a market with low market access, high market risk, and greater control post acquisition. These findings offer improvements on previously examined variables and provide insight into a market not sufficiently examined in prior research.

Suggested Citation

  • C. Bülent Aybar & Wendy M. Jeffus & John C. Edmunds, 2012. "Successful Cross-border Acquisitions of Latin American Financial Institutions: Identifying Success Factors," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(3), pages 347-367, September.
    • Handle: RePEc:sae:emeeco:v:4:y:2012:i:3:p:347-367
    DOI: 10.1177/0974910112459699
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