Cross-Border Mergers and Acquisitions: The Role of Private Equity Firms

Arbeitspapier

We study the role of private equity firms in cross-border mergers and acquisitions. We find that private equity-owned firms are more likely to become targets in crossborderM&A transactions. This effect is particularly strong in transactions where the target or its shareholders actively reach out for an acquirer. On average, cross-borderdeals with private equity-involvement are not associated with higher announcement returns. However, announcement returns are higher if the acquirer is owned by a private equity firm and the target is from a country with poor corporate governance. We provide evidence indicating that the international networks and connections that result from prior cross-border deals can explain why private equity firms create value in such deals. Our findings suggest that private equity firms can help to reduce information asymmetries in certain cross-border M&A deals. We perform several tests to address possible endogeneity concerns.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 12-031/2/DSF32

Classification and Topics

• Classification: Wirtschaft ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
• Subject: Mergers and acquisitions ; private equity ; information asymmetries ; Übernahme ; Multinationales Unternehmen ; Private Equity ; Eigentümerstruktur ; Corporate Governance ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Humphery-Jenner, Mark ; Sautner, Zacharias ; Suchard, Jo-Ann
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/87438
• Last update: 10.03.2025, 11:46 AM CET