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Cross-border mergers and acquisitions using ADRs as consideration

  • Owers, James E.
  • Lin, Bing-Xuan
  • Rogers, Ronald C.
Registered author(s):

    This paper examines why the use of American Depositary Receipts as the means of consideration in cross-border mergers and acquisitions introduces issues distinct from those associated with the use of equity consideration in purely domestic acquisitions. We find that acquirers' returns exhibit considerable variation. The implications of varying institutional attributes of transactions are examined and we show how different sub-samples vary in terms of transactional details and valuation consequences. Overall, we find acquirers experience less negative outcomes than acquirers using equity as consideration in domestic transactions; furthermore acquirer's performance is better when the target is in a different industry.

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    File URL: http://www.sciencedirect.com/science/article/B6W4V-4P40KTD-2/1/4e37012fe90c4923574d883e57d4cb78
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    Article provided by Elsevier in its journal International Review of Economics & Finance.

    Volume (Year): 17 (2008)
    Issue (Month): 2 ()
    Pages: 306-318

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    Handle: RePEc:eee:reveco:v:17:y:2008:i:2:p:306-318
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620165

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