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Value creation in European M&As

Author

Listed:
  • 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.

Suggested Citation

  • Campa, Jose M. & Hernando, Ignacio, 2002. "Value creation in European M&As," IESE Research Papers D/471, IESE Business School.
  • Handle: RePEc:ebg:iesewp:d-0471
    as

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    File URL: http://www.iese.edu/research/pdfs/DI-0471-E.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

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

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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