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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)

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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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Publisher 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;

Find related papers by JEL classification:
G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General

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References listed on IDEAS
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    Other versions:
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  18. Maquieira, Carlos P. & Megginson, William L. & Nail, Lance, 1998. "Wealth creation versus wealth redistributions in pure stock-for-stock mergers1," Journal of Financial Economics, Elsevier, vol. 48(1), pages 3-33, April. [Downloadable!] (restricted)
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    Other versions:
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