Author : Marcelo Braga Dos Santos
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (129 download)
Book Synopsis Does Corporate International Diversification Destroy Value? Evidence from Cross-Border Mergers and Acquisitions by : Marcelo Braga Dos Santos
Download or read book Does Corporate International Diversification Destroy Value? Evidence from Cross-Border Mergers and Acquisitions written by Marcelo Braga Dos Santos and published by . This book was released on 2008 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the valuation effects of corporate international diversification by examining cross-border mergers and acquisitions of U.S. acquirers over the period 1990-1999. We find that, on average, acquisitions of quot;fairly valuedquot; foreign business units do not lead to value discounts. Consistent with the industrial diversification discount literature, unrelated cross-border acquisitions result in a significant diversification discount of about 24 percent after accounting for the valuation of foreign targets. Furthermore, significant wealth gains accrue to foreign target shareholders regardless of the type of acquisition. Overall, our results suggest that international diversification does not destroy value while industrial diversification leads to discounts even after controlling for the pre-acquisition value of the target.