Search results

1 – 10 of over 2000
To view the access options for this content please click here
Book part
Publication date: 14 November 2014

Yaqoub Alabdullah and Stephen P. Ferris

This study uses cross-border mergers as a test of the ability of foreign directors to provide effective strategic advising. We find that firms with foreign directors on…

Abstract

This study uses cross-border mergers as a test of the ability of foreign directors to provide effective strategic advising. We find that firms with foreign directors on their boards are more likely to engage in cross-border mergers, pursue a higher number of cross-border mergers, and invest more in those mergers. We further determine that firms with foreign directors are more likely to undertake nondiversifying mergers, enjoy friendly mergers, and acquire privately held targets. Moreover, we find that firms with foreign directors have higher announcement period returns and pay less for their cross-border targets.

Details

Corporate Governance in the US and Global Settings
Type: Book
ISBN: 978-1-78441-292-0

Keywords

To view the access options for this content please click here
Article
Publication date: 1 July 2003

Michael A. Hitt and Vincenzo Pisano

Cross‐border mergers and acquisitions present significant opportunities for firms wishing to diversify their activities geographically, learn new knowledge, and gain…

Downloads
2783

Abstract

Cross‐border mergers and acquisitions present significant opportunities for firms wishing to diversify their activities geographically, learn new knowledge, and gain access to valuable resources. Cross‐border mergers and acquisitions present multiple challenges as well. These include the difficulty of evaluating target firms, cultural and institutional differences, and the liabilities of foreignness among others. We compare acquisitions to enter new markets with other market entry mechanisms (strategic alliances and greenfield ventures), and conclude with suggestions for future research to advance our knowledge of this strategy of increasing importance globally.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 1 no. 2
Type: Research Article
ISSN: 1536-5433

Keywords

To view the access options for this content please click here
Article
Publication date: 3 October 2016

K.S. Reddy, En Xie and Yuanyuan Huang

Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper…

Downloads
3131

Abstract

Purpose

Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper is to analyze three litigated cross-border inbound acquisitions that associated with an emerging economy – India, such as Vodafone-Hutchison and Bharti Airtel-MTN deals in the telecommunications industry, and Vedanta-Cairn India deal in the oil and gas exploration industry. The study intends to explore how do institutional and political environments in the host country affect the completion likelihood of cross-border acquisition negotiations.

Design/methodology/approach

Nested within the interdisciplinary framework, the study adopts a legitimate method in qualitative research, that is, case study method, and performs a unit of analysis and cross-case analysis of sample cases.

Findings

The critical analysis suggests that government officials’ erratic nature and ruling political party intervention have detrimental effects on the success of Indian-hosted cross-border deals with higher bid value, listed target firm, cash payment, and stronger government control in the target industry. The findings emerge from the cross-case analysis of sample cases contribute to the Lucas paradox – why does not capital flow from rich to poor countries and interdisciplinary M&A literature on the completion likelihood of international takeovers.

Practical implications

The findings have several implications for multinational managers who typically involve in cross-border negotiations. The causes and consequences of sample cases would help develop economy firms who intend to invest in emerging economies. The study also offers some implications of M&A for telecommunications and extractive industries.

Originality/value

Although a huge amount of extant research investigates why M&A fail to create value to the shareholders during the public announcement and post-merger stages, there is a significant dearth of research on the causes and consequences of delayed or abandoned national and international deals. The paper fills this knowledge gap by discussing an in-depth cross-case analysis of Indian-hosted cross-border acquisitions.

Details

Journal of Organizational Change Management, vol. 29 no. 6
Type: Research Article
ISSN: 0953-4814

Keywords

To view the access options for this content please click here
Article
Publication date: 6 July 2015

Milena Ratajczak-Mrozek

The purpose of this paper is to address two research questions. First: what causes an small and medium enterprises (SME) to engage in a merger with a multinational group…

Downloads
1862

Abstract

Purpose

The purpose of this paper is to address two research questions. First: what causes an small and medium enterprises (SME) to engage in a merger with a multinational group and thereby change its relationships and to start functioning in a hierarchical structure which may be viewed as being the integration of a weaker entity by a stronger and bigger one? And second: what causes the successful continuation of a cross-border merger project from the perspective of an SME?

Design/methodology/approach

The concept of the network position is adopted to undertake a longitudinal study of an IT company from Poland.

Findings

From the perspective of the SME, its own perceived important network position resulting from the resources it possesses, the ability to decide how they are utilised, as well as relationships strongly supported by trust and a good atmosphere are key motives and success factors for the merger.

Originality/value

By adapting the IMP research perspective and the concept of network position to the analysis of mergers the additional aspects of the merger process which are usually not raised in relevant traditional mergers and acquisitions literature are revealed. A merger is not just the sourcing of resources, but also interdependencies and taking joint decisions with regard to them; not just economic aspects, but also social aspects of relationships (trust and atmosphere); not just the sharing of resources between merged entities, but also the constant influence of other relationships and interactions on these resources.

To view the access options for this content please click here
Article
Publication date: 1 January 2006

Kofi A. Amoateng

The aim of this research is to find out which mergers and acquisitions (M&A) market is better able to absorb all the shocks from legislations in securities and banking in…

Downloads
1166

Abstract

Purpose

The aim of this research is to find out which mergers and acquisitions (M&A) market is better able to absorb all the shocks from legislations in securities and banking in Europe and the USA, 11 September 2001 terrorist attacks in the USA, and other global events. The most exogenous or self‐dependent market may be the mover and shaker in the M&A deals in the world. The sample period spans from October 1998 to September 2004.

Design/methodology/approach

This research uses cointegration and innovation accounting techniques (variance decomposition analysis and impulse response functions) to find out: if the two M&A markets are linked and explained each other in the long‐run; which of the two markets can able to withstand all the list shocks in the observed period; how long each of the market is about to deal with the shocks (are the shocks long‐lasting or short‐lasting?).

Findings

The major findings are: The cointegration results indicate that the M&A markets in Europe and the USA tend to move together in the long‐run, particularly, the European M&A deals (EUMA) and US cross‐border M&A deals in Europe (USCROSS). On one hand, the most consistent result from the variance decomposition analysis and impulse response functions is that the European M&A market is the most exogenous or self‐dependent market in the observed period. On the other hand, the most interactive market (less able to deal with the shocks) is the US M&A market (USMA) because it is significantly impacted by the legislations in securities and banking, 9/11 and other global events. US cross‐border M&A deals in Europe (USCROSS) and European cross‐border M&A deals in the USA (EUCROSS) are able to deal with the shocks when the order of VAR is 6. However, when the order of VAR is extended to 12 they are less able to absorb the shocks.

Research limitations/implications

The limitation of the data at that time did not allow examination of US M&A deals with individual European countries, particularly, United Kingdom that has historically invested in the US more than any country in Europe.

Practical implications

The pivotal conclusion of this study suggests that EUMA and USCROOS move together in the long‐run and EUMA is the strongest market in dealing with shocks, the world business may be gradually shifting to Europe. Practically, most of the multinational corporations (MNCs), especially the US MNCs are craving for market niches in Europe.

Originality/value

The real value of this paper is that the changing financial landscape is the US implies that all the shake‐up may lead to Europe. Philosophically, “all roads lead to Rome” New trends in world business is that the center of gravity in business may be pointing to Europe.

Details

Review of Accounting and Finance, vol. 5 no. 1
Type: Research Article
ISSN: 1475-7702

Keywords

To view the access options for this content please click here
Book part
Publication date: 24 January 2011

Daniel R. Denison, Bryan Adkins and Ashley M. Guidroz

Cross-border M&A has become one of the leading approaches for firms to gain access to global markets. Yet there has been little progress in the research literature…

Abstract

Cross-border M&A has become one of the leading approaches for firms to gain access to global markets. Yet there has been little progress in the research literature exploring the role that culture may play in the success of these ventures. Poor culture-fit has often been cited as one reason why M&A has not produced the outcomes organizations hoped for (Cartwright & Schoenberg, 2006). Cross-border M&A has the added challenges of having to deal with both national and organizational culture differences. In this chapter we review the literature on cultural integration in cross-border M&A and provide a framework designed to help manage the integration process throughout the M&A lifecycle. This framework presents culture assessment and integration as a crucial component to reducing poor culture-fit as a barrier to M&A success.

Details

Advances in Global Leadership
Type: Book
ISBN: 978-0-85724-468-0

To view the access options for this content please click here
Book part
Publication date: 26 August 2014

Kamal Ghosh Ray and Sangita Ghosh Ray

Cross-border mergers and acquisitions are now the fundamental mechanisms of globalization and considered as prime vehicles for business engagement across the countries…

Abstract

Cross-border mergers and acquisitions are now the fundamental mechanisms of globalization and considered as prime vehicles for business engagement across the countries through the foreign direct investment route. Significant amounts of foreign funds are crossing the country borders for acquisitions with the objectives of earning super normal returns. But realizing super normal returns from foreign acquisitions are far more difficult than that of foreign greenfield projects or domestic M&As or greenfield projects. The super normal profit itself is “synergy” which is the main driving force for any M&A including the cross-border one. Even though foreign policies of individual countries affect cross-border M&A decisions, corporate and market-driven financial numbers significantly influence the synergy estimation. Synergy should bring in all round greater efficiency and value addition to all stakeholders. But if the cross-border deal is not financially crafted properly, it may fall flat causing more distress to the acquirer compared to domestic acquisition. The theory of synergy is well developed which mostly applies to the domestic M&As. But due to inherent differences between cross-border and domestic M&As, the same synergy theory may not apply equally to the cross-border ones. Therefore, a different connotation of synergy is propounded in this work for cross-border M&As, which can be a corollary to the conventional theory of synergy. This alternative theory of synergy aims at helping the companies in developing their own financial strategies before making their strategic decisions for cross-border M&A deals.

Details

Advances in Mergers and Acquisitions
Type: Book
ISBN: 978-1-78190-836-5

Keywords

To view the access options for this content please click here
Book part
Publication date: 30 March 2017

Narjess Boubakri, Jean-Claude Cosset and Dev Mishra

We examine the market valuation of targets with multiple large shareholders (MLS) and single large shareholder (SLS) structures, in an international sample of M&A…

Abstract

We examine the market valuation of targets with multiple large shareholders (MLS) and single large shareholder (SLS) structures, in an international sample of M&A announcement in 19 countries outside North America. We find that the presence and power of MLS in these firms are negatively associated with abnormal returns and first-bid-to-merger-completion returns, suggesting that MLS mitigate agency problems in the target, and hence their acquisition is perceived as “a loss of good governance.” The negative association between MLS targets and returns is stronger in widely held firms suggesting that MLS indeed curb expropriation of minority shareholders. By contrast, when the second largest shareholder in the MLS structure of the target is a family, we find positive cumulative abnormal returns at the merger announcement, suggesting exacerbated agency problems in these firms that should benefit from the “acquisition of good governance.” Our evidence is robust to a battery of tests and to addressing potential endogeneity.

To view the access options for this content please click here
Article
Publication date: 1 February 1995

Theo Kiriazidis and George Tzanidakis

Suggests that EU legislation has induced enormous changes in thestructure of the European financial markets, and that financialinstitutions increasingly modify their…

Downloads
1084

Abstract

Suggests that EU legislation has induced enormous changes in the structure of the European financial markets, and that financial institutions increasingly modify their strategies to cope with the new developments. Identifies which type of corporate strategy enhances organizational efficiency. The position developed is that, at the national level, a multipurpose institution (or “financial supermarket”, offering a range of financial services, such as banking, insurance, pensions, etc.), with quasiindependent entities, could serve this objective. At the European level, given the remaining obstacles to financial integration, the risks and the high costs of cross‐border mergers and acquisitions, alliances of financial institutions appear to be the appropriate response.

To view the access options for this content please click here
Article
Publication date: 9 February 2015

Rudolf R. Sinkovics, Noemi Sinkovics, Yong Kyu Lew, Mohd Haniff Jedin and Stefan Zagelmeyer

The purpose of this paper is to examine operational-level implementation issues regarding mergers and acquisitions (M&As) in general, and resource combination and…

Downloads
2475

Abstract

Purpose

The purpose of this paper is to examine operational-level implementation issues regarding mergers and acquisitions (M&As) in general, and resource combination and integration at the functional marketing level in particular.

Design/methodology/approach

The paper introduces four factors (i.e. collaboration, interaction, marketing synergy, and the realignment of marketing resources) that support successful M&A marketing integration and enhance overall M&A performance.

Findings

The results indicate that marketing synergy and the realignment of marketing resources contribute significantly to the extent of integration. At the same time, the authors find a significant but negative relationship between the interaction dimension and the speed of integration.

Originality/value

The cultural integration of firms that feature different management styles and organizational cultures has been recognized as a particularly challenging aspect of cross-border M&As. This study explains factors that contribute to effective marketing integration in M&As.

Details

International Marketing Review, vol. 32 no. 1
Type: Research Article
ISSN: 0265-1335

Keywords

1 – 10 of over 2000