Impact of cross-border mergers and acquisitions on shareholders’ wealth : does idiosyncratic risk matter !

Mili, Medhi (Dep. of Economics and Finance, College of Business, University of Bahrain) ; Sahut, Jean-Michel (IDRAC Business School, France ; School of Management Fribourg, HES-SO // University of Applied Sciences Western Switzerland)

This paper explores the extent to which Idiosyncratic risk of the target increases acquires shareholders wealth in cross-border takeovers. Using a sample on 15,619 cross-border takeovers, we find that cross-border add value to target firms stockholders. Our results show that the well documented superior acquirer gains in cross-border deals do not persist for firms with low idiosyncratic risk. We point out a transfer of risk from the target firm to the bidder, mainly in deals involving private target. We suggest that under information asymmetry concerning the bidder, the market reaction to a cross border deal is mainly led by the fact that acquirer’s stock is underpriced, rather than deal’s synergy potential.


Mots-clés:
Type de conférence:
full paper
Faculté:
Economie et Services
Ecole:
HEG-FR
Classification:
Economie/gestion
Adresse bibliogr.:
Nice, France, 5-6 July 2017
Date:
Nice, France
5-6 July 2017
2017
Pagination:
24 p.
Publié dans
Proceedings of the 8th International Research Meeting in Business and Management (IRMBAM-2017)
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 Notice créée le 2017-10-01, modifiée le 2018-12-05

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