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Value creation in European M&As

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Author Info

  • Campa, Jose M.

    ()
    (IESE Business School)

  • Hernando, Ignacio

    ()
    (Banco de España)

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.

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Bibliographic Info

Paper provided by IESE Business School in its series IESE Research Papers with number D/471.

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Length: 31 pages
Date of creation: 10 Oct 2002
Date of revision:
Handle: RePEc:ebg:iesewp:d-0471

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Postal: IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN
Web page: http://www.iese.edu/
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Related research

Keywords: Cross-border mergers; shareholder returns; value creation; regulation;

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References

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