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The aim of this paper is to discuss the trend towards cross‐border mergers and acquisitions (M&A) and review best practices for successful cross‐border M&A transactions (and how they differ from executing national deals).

The objectives are achieved through a review of four best practices for successful planning, implementation and execution of cross‐border deals. Also, a March 2006 Accenture/Economist Intelligence Unit survey is used which highlights trends towards cross‐border deals and common pitfalls in the successful execution of deals – in particular the difficulties in addressing cultural issues and local due diligence.

The paper finds that executives believe in their M&A strategy but doubt their organizational ability to successfully implement and execute and to realize financial gains and cross‐border deals offer a different mix of opportunities and risks, which need to be understood and managed if the deals are to be successful. The key to success lies in understanding exactly what makes cross‐border deal making different, and in developing the skills needed to create value.

There are four key drivers of success in cross‐border M&A: start with a clear and compelling strategy – the most successful cross‐border acquirers begin with a clear view of both the role that cross‐border acquisitions will play in their strategy and the type of companies best equipped to fill that role; do your homework – the greatest risks in cross‐border transactions arise from the failure to understand the culture, regulatory structure or competitive environment – and sometimes all three considerations – in the target market; value your new people – regardless of the rationale for the acquisition, a key asset – many would argue the most important one – in a cross‐border acquisition is people; and execution, execution, execution – successful execution begins early – in some cases, long before the deal is done.

A recent survey (Accenture/Economist Intelligence Unit, March 2006) shows for the first time that among global M&A deals, cross‐border transactions now exceed domestic transactions – and this trend is likely to continue. Yet for many c‐level executives, the prospect of acquiring or merging with a company in an unfamiliar market is daunting – and cross‐border M&A is considered more difficult than executing on domestic deals. This paper is intended to give c‐level executives practical, hands‐on advice for conducting cross‐border M&A as well as publicizing survey results specifically on the cross‐border M&A trend.

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.

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.

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.

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.

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.

Given that several publicly announced international merger and acquisition deals have been abandoned in recent years, the purpose of this paper is to present a synthesis of influential articles that examine organizational characteristics of cross-border acquisition transactions. The synthesis is framed through general traits and resources, learning and prior acquisition experience, and top-level management and governance attributes. Specifically, the paper conceptualizes key organizational attributes influencing the propensity of cross-border negotiations, and the most common characteristics and post-deal effects by illustrating several case examples from around the world.

Owing to fairness and integrity principles of the literature survey studies, the paper adopts an exploratory review design to present a synthesis of several influential articles published in strategy, international business and corporate finance journals. Since case method and storytelling are the best qualitative approaches to conceptualizing extant theoretical contributions, a number of case examples—successful, delayed and abandoned—from around the world have been discussed by leveraging the case information from archival sources.

Drawing on resource-based view, organizational learning, upper echelons and agency theory perspectives, the paper underscores three observations. First, organizational characteristics such as firm age, firm size, ownership structure, slack resources, marketing resources, technological intensity, export intensity and business group affiliation have different impacts on the propensity of publicly announced cross-border deals. Second, firm’s prior acquisition experience and firm’s acquisition experience in the target country have positive or moderating effects on the success of a cross-border merger. Third, top-level management characteristics such as CEO foreign nationality and CEO international career experience, and governance characteristics such as board size, the number of independent directors and directors with overseas experience, have mixed effects on the incidence of cross-border acquisitions.

The paper puts forth several recommendations for top-level managers participating in cross-border acquisition negotiations, such as learning from peers in the same industry, learning from predecessors in the target country and learning from failure negotiations in the same industry and other industries.

Nested within the organizational, international business strategy and corporate finance literature, the paper presents a synthesis of influential publications that study organizational characteristics affecting the propensity of cross-border acquisitions. The cases discussed in this paper are unique examples from around the world.

This paper focuses on the influence of overconfident managers on strategic investment acquisitions performance, by investigating the influence of key contextual factors on acquirers’ returns of UK domestic and cross-border acquisitions during the period 2000-2009. In this study, particular attention has been paid to management attributes (frequent acquirers vs non-frequent acquirers); method of payment (cash vs non-cash deals); the geographic scope (domestic vs cross-border deals); the type of the target (public vs private); the industry scope; and the relative size.

An event study is used to analyse domestic and cross-border acquisitions. The market model is used for estimating the acquirers’ abnormal returns of 1,133 domestic and cross-border acquisitions by UK firms between 1 January 2000 and 31 December 2009.

The findings reveal that acquirers with domestic targets have higher returns than cross-border targets. Infrequent acquirers generate higher returns from domestic and cross-border acquisitions than frequent acquirers. Further, acquirers that acquire domestic targets from different industrial sectors produce higher returns than acquirers with targets from the same sector. Acquirers with cash deals, private targets and high book-to-market ratio generate significant returns compared to acquirers with non-cash deals, low book-to-market ratio and public targets and that for domestic and cross-border deals. These results suggest that UK domestic and cross-border acquisitions are partially shaped by overconfident managers.

The study has a number of limitations, including the use of the market model, the data-collection process and the limited number of contextual factors. Future research may examine a number of avenues related to the current study, including incorporating the acquiring firms’ financial characteristics.

The study provides a better understanding of the influence of contextual factors on the success and failure of strategic investment projects such as acquisitions. Results of post-acquisitions performance in UK firms show how estimation of value can be distracted at the pre-acquisition stage because of overconfident managers.

Results of post-acquisitions performance in UK firms show how estimation of value can be distracted at the pre-acquisition stage because of overconfident managers.

Nested within the industrial organization and corporate finance literature, this paper aims to analyze the market for cross-border mergers and acquisitions (M&A) in the world economy, developed economies, developing economies and transition economies. As multinational companies hold a large proportion of cash reserves and expand into diverse geographic markets, the paper aims to examine market patterns of high-valuation cross-border acquisition transactions. Specifically, it proposes a framework explaining the influential factors, motives and effects of high-valuation transactions by discussing some case evidences.

Drawing upon inductive and deductive logic, the paper discusses market trends and market patterns of cross-border M&A transactions by triangulating archival data analyses and accessible M&A literature. Some case examples are derived from news archive and official source sites. Regarding sample period, it considers the past two decades 1994-2013 to show market trends in various institutional settings and the past decade 2004-2013 to present market patterns of 62 high-valuation cross-border deals.

The transaction analysis indicates four cycles in the market trend, namely, growing period (1994-2000); declining, but promising period (2001-2006); financial crisis period (2007-2008); and recovering, but reversing period (2009-2013). A number of acquisitions undertaken by firms from emerging economies around the 2007-2008 global financial crisis have exemplified geographic (product) diversification as a primary motive of firm’s global strategy. In particular, a large proportion of sample high-valuation deals are spotted in developed economies such as the USA and the UK. In case of industry pattern, a good number of high-valuation deals are noticed in banking and finance, telecommunications and oil and gas sector.

Although several scholars have examined cross-border acquisitions in economics, corporate finance, strategy and international business literature, there is hardly any study that analyzes high-profile cross-border M&A deals. An exclusive market analysis of high-valuation international deals is important for several reasons. This paper fills this knowledge gap by showing both market trends and market patterns of cross-border M&A transactions. Importantly, to date, this paper is the first to propose a framework explaining the influential factors, motives and effects of high-valuation M&A transactions.

Extending the springboard perspective with the resource dependence theory, the authors posit that cross-border mergers and acquisitions (M&As) are a new channel for emerging economy firms (EEFs) to enhance their technology capabilities. This study aims to examine the impact of cross-border M&As initiated by EEFs on their technology augmentation vis-à-vis matched domestic M&A cases and investigate the factors influencing the difference in post-merger innovation capability.

This paper estimates the post-acquisition innovation capability of acquirers from emerging economies (EEs) that engage in cross-border M&As. To remove possible selection bias, the authors leverage a difference-in-difference-style approach in combination with a matched sample constructed by pairing each cross-border M&A case with a similar domestic deal. The data set contains 266 cross-border M&As and 266 matched domestic M&A deals between 2003 and 2011, whereby acquirers are based in 6 EEs and targets are in 36 countries consisting of both EEs and advanced economies (AEs).

The present empirical results show that cross-border M&As engaged by EEFs are an important engine for improving EEFs’ innovation capability through technology augmentation. The main empirical results are as follows. First, compared with matched domestic acquirers with similar characteristics, EE cross-border M&As have a positive effect on innovation capability. Second, the positive effect of the EEFs’ cross-border M&As relative to the matched domestic M&As on innovation capability is driven largely by cross-border M&As with targets in AEs. Third, the increase in post-M&A innovation capability of the EE cross-border acquirers comes mainly from deals where targets are based in countries with relatively superior human capital and innovation capability than those of the acquirers.

To the best of the authors’ knowledge, this study is the first systematic study of whether cross-border M&As serve as an effective channel of technology augmentation for EE acquirers compared to matched domestic acquirers with similar characteristics.

The purpose of this study is to examine the impact of the transposition of the EU directive that regulates M&As on cross-border deals. Acquirers of targets located in the European Union (EU) must comply not only with takeover rules set individually by member states but also with European Council Directives. The most significant of these Directives in the context of mergers and acquisitions (M&As) is the Takeover Bids Directive (TBD). The intent of the Directive is to ensure equal treatment for all companies launching takeover bids or that are subject to a change in control, providing minimum harmonization rules in view of creating a transparent environment for cross-border takeovers.

This study uses the event-study and difference-in-differences approaches.

Using a sample of 2,129 M&As conducted between 2000 and 2015, this paper finds positive acquisition synergy for acquirers targeting firms from countries with stronger investor protection rules compared to the average of the EU, but no evidence regarding cross-border deals. The results support the prediction that regulation makes countries diverge more depending on their ex ante level of investor protection.

This study examines the impact of the enactment of the TBD on announcement returns of M&As in the EU.

This paper aims to examine value gains to acquirers in large commercial bank mega‐mergers (with transaction values over £1 billion) that occurred in the European Union during the period 1997‐2007, distinguishing between domestic and cross‐border transactions.

Based on a sample of 62 bank mega‐mergers, an event study methodology is employed using a market model to determine cumulative standardised abnormal returns (CSAR) to acquiring banks around the announcement date of merger deals. This is followed by cross‐sectional regression to determine specific characteristics driving acquirers' CSAR.

Cross‐border bank mergers have been more frequent in recent years, reflecting a growing trend of banking sector consolidation in the EU. However, such mergers are found to yield significant negative announcement period acquirer returns, while domestic deals have marginally negative but insignificant returns. The operational cost efficiency and capital strength of acquiring banks are found to be significant in influencing excess returns.

Constraints on data availability limited the scope for sensitivity analysis and incorporation of target characteristics in the cross‐sectional regression of drivers affecting acquirers' CSAR. Further research is aimed to address these issues.

Event study and regression results indicate that potential downside risks are judged by market participants to outweigh the benefits from cross‐border M&As in the retail banking market despite evidence of increased financial sector consolidation in the EU.

The study reflects the recent period of increased cross‐border banking consolidation in the EU and reveals findings that differ in some respects from previous studies on EU bank M&As.

Many announced cross-border mergers and acquisitions (M&As) are never brought to completion despite potential negative consequences to acquirers and targets. This paper presented evidence on the dynamic effects of spatial distance and two industry-level characteristics, namely industry relatedness between the two firms and technological intensity, on the completion likelihood of cross-border M&A deals. Based on a sample of 8,489 M&A transactions we found that the completion likelihood of cross-border M&As increases with spatial distance. The effect is more pronounced for deals across technology-based industries, evidence for related deals is inconclusive.

The study aims to evaluate and compare the mergers and acquisitions (M&As) performance utilising a sample of deals originating from Brazil, Russia, India, China and South Africa (BRICS). In addition to nation-wise performance analysis, a further sub-sample analysis is conducted based on the target location (domestic and cross-border), development status (developed and emerging) and the acquired ownership stakes (majority and minority).

The final sample of the study includes 7,105 deals announced between 2000 and 2019. M&A performance is proxied by the abnormal returns earned over the select event windows. Multiple parametric and non-parametric tests are employed for testing the robustness.

The results indicate significant performance differences across BRICS markets, with the highest and lowest abnormal returns reported for Chinese and Russian acquirers, respectively. The disaggregated analysis also affirms the performance differences for the select sub-samples.

The study highlights the need for acknowledging and expounding the differences in M&As across emerging markets. Further, the results of the study provide a possible explanation of the disagreement over the M&A performance results reported in the previous literature.

Acknowledging and understanding the potential performance differences based on location, ownership strategies and development status can aid executives in sharpening decision-making and also help general investors.

The study contributes by examining a comprehensive sample of deals across five major emerging economies, as against the majority of previous studies which have their results based on either single nation samples or have utilised only a sub-sample of domestic or foreign acquisitions.