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Are cross-border mergers and acquisitions better or worse than domestic mergers and acquisitions? The UK evidence

Ayoush, Maha Diab (2011)
Ph.D. thesis, University of Birmingham.

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Abstract

Mergers and acquisitions (M&As) are important corporate strategy actions that are vital for the companies in order to survive in this competitive global world. The popularity of those actions has increased over the years, especially in the international domain. In the UK, both the number and value of cross-border M&As has increased significantly over the years. Despite this increase, there haven’t been enough studies or clear evidence about whether venturing abroad to acquire foreign targets leads the companies to better performance compared to staying domestically.
Therefore, the purpose of this thesis is to investigate the M&A phenomenon deeply and compare between cross-border and domestic M&As made by UK public acquirer firms. More specifically, the thesis concentrates on three main issues which are: (1) the difference between the returns to shareholders of acquirer firms involved in cross-border and domestic M&As; (2) the difference between the operating performance of acquirer firms involved in cross-border and domestic M&As; and (3) the difference between the impacts of cross-border and domestic M&As on the operating performance of acquirer and target firms combined.
Market-based and accounting-based approaches are used to investigate a sample of UK acquirer firms engaged in cross-border and domestic M&As both in the short-term and in the long-term periods. In general, the results reveal insignificant differences between the shareholders’ returns and operating performances of acquirer firms involved in cross-border and domestic M&As over the short- and long-term periods. On the other hand, the results for acquirer and target combined firms show that cross-border M&As have lower operating performances than domestic M&As.
Recommendations are provided in order to help the decision and policy makers in the companies to decide whether cross-border M&As should be actively encouraged or discouraged in comparison with domestic M&As.

Type of Work:Ph.D. thesis.
Supervisor(s):Adedeji, Adimbola and Liao, Chen-Hui
School/Faculty:Colleges (2008 onwards) > College of Social Sciences
Department:Birmingham Business School, Department of Accounting and Finance
Subjects:HF Commerce
HG Finance
Institution:University of Birmingham
ID Code:1589
This unpublished thesis/dissertation is copyright of the author and/or third parties. The intellectual property rights of the author or third parties in respect of this work are as defined by The Copyright Designs and Patents Act 1988 or as modified by any successor legislation. Any use made of information contained in this thesis/dissertation must be in accordance with that legislation and must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the permission of the copyright holder.
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