A century of corporate takeovers: What have we learned and where do we stand?

Мартынова, Марина; Renneboog, Luc

doi:10.1016/j.jbankfin.2007.12.038

Cited by 430 publications

(351 citation statements)

References 195 publications

(147 reference statements)

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“…17.39% of deals are thus compensated through a mix of different financial instruments. (Note 5) These numbers are highly comparable to those found in other studies on European M&As as of the 1990s (e.g., Martynova and Renneboog, 2008;Craninckx and Huyghebaert, 2011). Yet, they are clearly different from those found in US samples.…”

Section: Datasupporting

confidence: 85%

“…This run-up may arise from information leakage and/or insider trading, thereby anticipating part of the M&A value creation (e.g., Craninckx and Huyghebaert, 2011). Although prior studies in general report a negative or, at best, an insignificant bidder announcement return (e.g., Andrade et al, 2001;Martynova and Renneboog, 2008;Bouwman et al, 2009), we find that the shareholders of the acquiring firm gain significantly upon deal announcement. Over the three-day window surrounding the M&A announcement date, the average bidder CAR equals a highly significant 1.21%.…”

Section: Financial Synergiescontrasting

confidence: 51%

“…Moreover, while takeovers used to be popular particularly in the USA, the M&A waves of the 1990s and mid-2000s have turned out to be worldwide phenomena, with many deals originating in Asia and especially also in Europe (see Martynova and Renneboog, 2008;Huyghebaert and Luypaert, 2010). However, research on takeovers, typically relying on data from earlier waves, has pointed out that many acquisitions are often unable to meet the great expectations expressed at their notification.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Sources of Synergy Realization in Mergers and Acquisitions: Empirical Evidence from Non-Serial Acquirers in Europe

Huyghebaert¹,

Luypaert²

2013

International Journal of Financial Research

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We empirically investigate the sources, magnitude, and timing of synergy realization for 293 M&As by non-serial listed acquirers in Europe during [1997][1998][1999][2000][2001][2002][2003][2004][2005]. In contrast to much of the existing literature, we find that the shareholders of non-serial acquirers gain significantly upon deal announcement. Next, we unravel the various sources of M&A value creation, in particular operating synergies resulting either from revenue enhancement or from savings on operating costs and investments, and financial synergies. Compared to its non-combining industry peers, the median combined sample firm reports a 4.92% larger sales growth rate by the third post-deal year. Operating costs relative to sales are reduced by an extra 1.53% over this same window. In leverage-increasing acquisitions, the median combined firm realizes a persistent 6.09% rise in its long-term debt ratio. Finally, our multivariate regression results point out that non-serial acquirers with a larger market-to-book ratio achieve more extensive operating synergies.

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Section: Datasupporting

confidence: 85%

Section: Financial Synergiescontrasting

confidence: 51%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Sources of Synergy Realization in Mergers and Acquisitions: Empirical Evidence from Non-Serial Acquirers in Europe

Huyghebaert¹,

Luypaert²

2013

International Journal of Financial Research

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“…Extensive studies have illustrated that cash-financed M&As yield positive abnormal returns, whereas stock-financed M&As generate negative abnormal returns (Blackburn, Dark, & Hanson, 1997;Brown & Ryngaert, 1991;Faccio & Masulis, 2005;Mann & Kohli, 2009;Martynova & Renneboog, 2008;Smith & Kim, 1994). Information asymmetry about the true value of the acquirer's stock and the disciplinary role of debt incurred for cash financing are widely accepted as the reasons that cause this difference (Yook, 2003).…”

Section: Mode Of Paymentmentioning

confidence: 99%

The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms

Nicholson

Salaber

2013

International Business Review

166

155

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During the recent decade, the world has witnessed the rapid growth of MNEs from emerging economies. Their increasing participation in cross-border mergers and acquisitions has raised great attention in the extant literature. This study evaluates the value creation from these cross-border transactions from two representative emerging countries, namely China and India, and determines factors that result in the different performance of these international acquisition activities. Crossborder acquisitions conducted by these countries' companies indeed lead to significant shareholder wealth creation. Furthermore, Indian shareholders are more likely to benefit from deals in small cultural distance countries, while Chinese investors gain from the cross-border expansion of manufacturing companies. Location also affects the performance of cross-border acquisitions, with acquisitions into developed countries generating higher returns to shareholders. Our sample consists of 203 Indian and 63 Chinese cross-border deals over the period 2000-2010 and our results hold after controlling for various deal-level and firm-level characteristics.

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“…Prior research also provide clear indication that the differences between bidders' and targets' corporate governance aspects, legal and institutional environments, and the level of financial market development where the two firms are located are important features that could affect postmerger performance (see, e.g., Rossi and Volpin, 2004, Martynova and Renneboog, 2008a,b, Burns et al, 2007, Bris and Cabolis, 2008and Francis et al, 2008. The results based on the extant literature generally support the view that national corporate governance regulation has a significant impact on cross-border takeovers.…”

Section: Literature Review and Theoretical Underpinningsmentioning

confidence: 99%

Cross-border mergers and acquisitions and default risk

Koerniadi

Krishnamurti

Tourani‐Rad

2015

International Review of Financial Analysis

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We examine the impact of cross-border mergers on acquirers' post-merger default risk using a sample of 375 US acquiring firms from 1997 to 2011. After controlling for cultural, institutional, geographic and managerial factors between the US and target firm countries, we find that on average, cross-border transactions decrease the level of default risk of the acquiring firms. Our results are consistent with the asymmetric information hypothesis that managers take advantage of the overvaluation and volatility of their stock prices. We also observe that the geographic distance and industrial relatedness play significant roles in affecting post-merger default risk but find limited evidence indicating the relevance of institutional environments and cultural factors on changes in default risk. We find that option compensation increases the risk-taking motives of managers in high risk firms. Another significant finding is that managers use cross-border mergers to manage the extant risk of their firms.

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A century of corporate takeovers: What have we learned and where do we stand?

Cited by 430 publications

References 195 publications

Sources of Synergy Realization in Mergers and Acquisitions: Empirical Evidence from Non-Serial Acquirers in Europe

Sources of Synergy Realization in Mergers and Acquisitions: Empirical Evidence from Non-Serial Acquirers in Europe

The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms

Cross-border mergers and acquisitions and default risk

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