The Euro and its Impact on the Number, Size, Performance and Regional Spread of European Mergers and Acquisitions

Abstract

The euro and its impact on the number, size, performance and regional spread of European mergers and acquisitions, Regional Studies. The macroeconomic effects of the euro have been extensively studied. The literature has, however, paid significantly less attention to the microeconomic consequences and few authors have considered if and how the euro has impacted firm-level decision-making. This paper explores if, how and in what way the euro has impacted one firm-level decision: whether to merge with or acquire another firm. This paper builds a sample of 19 362 acquisitions, announced in the period 1990-2014. It shows that the euro has dramatically increased the number, size and performance of European mergers and acquisitions. Importantly, it also notes that the euro has altered the geographic spread of European acquisitions. The paper reports that since the introduction of the euro, acquirers have made increasingly distant acquisitions and have preferred targets in peripheral regions to those in the core. The results also hint at the suggestion that the euro may have led acquirers to prefer Eurozone to non-Eurozone targets. From a policy perspective, it is concluded, therefore, that the euro has significantly impacted firm behaviour and has contributed, in a positive sense, to regional integration. Mergers and acquisitions Currency unions Euro Merger performance Merger spread Core and periphery MCCARTHY K. J. and DOLFSMA W. 欧元，及其对欧洲合併与收购的数量、规模、表现及区域扩散的影响，区域研究。 欧元的钜观经济效应已受到广泛的研究。但这些文献却鲜少关注欧元的微观经济结果，亦少有作者考量欧元是否、 以及如何影响企业层级的决策制定。本文探讨欧盟是否、如何、以及透过什麽方式，影响企业层级是否合併或收购 其他企业的决定。本文以 1990 年至 2014 年间宣佈的 19,362 个收购案为案例，显示出欧元戏剧性地增加了欧洲合 併与收购的数量、规模与表现。重要的是，欧元改变了欧洲收购的地理扩散。本文并记述，自从欧元引入后，收购者 逐渐进行远距收购，并较核心区域而言，更偏好瞄准边陲区域。研究结果同时暗示以下提议：欧元或已使得收购者偏 好欧元区的标的物更甚于非欧元区。本文因而于结论中主张，从政策的角度而言，欧元已显着地影响了企业行为， 并在正面意义上，导致了区域整合。 合併与收购 货币联盟 欧元 合併表现 合併扩散 核心与边陲 MCCARTHY K. J. et DOLFSMA W. L'euro et son impact sur le parc, la taille, la performance et la répartition régionale des fusions et des acquisitions européennes, Regional Studies. Les effets macroéconomiques de l'euro ont été étudiés de façon approfondie. Cependant, la documentation a prêté beaucoup moins d'attention aux conséquences microéconomiques et rares sont les auteurs qui ont considéré si, oui ou non, l'euro a eu un impact sur la prise de décision au niveau de l'entreprise, et de quelle façon. Cet article cherche à examiner si l'euro a eu un impact sur une décision particulière au niveau de l'entreprise, comment et de quelle façon: à savoir, devrait-on fusionner avec ou acquérir une autre entreprise? Cet article développe un échantillon *Corresponding author.

Spatial proximity, localized assets, and the changing geography of domestic mergers and acquisitions in transitional China

“…The determinants of the uneven distribution of M&As have also been a focus of the existing studies (Chapman, 2003;Ellwanger & Boschma, 2015). In addition to corporate strategies and business drivers, place-specific attributes also play a significant role (Green & Meyer, 1997;McCarthy & Dolfsma, 2015). According to the new regionalism, corporate behaviors are profoundly embedded in local economic, social and institutional contexts, and M&A is no exception (Dicken & Malmberg, 2001;Hess, 2004;Wei, 2015).…”

“…M&As have also played a critical role in the rise of corporate power, the creation of wealth, and the polarization of income inequality (Du & Boateng, 2015;Mason & Harrison, 2006). Therefore, there have been plenty of studies examining M&As in and out of the developed economies (DEs) (Green, 1987;McCarthy & Dolfsma, 2015;Warf, 2003).…”

“…Inter-regional proximities in economic development, industrial structure, and institutional setting also play a critical role in M&A partnering (Green & Meyer, 1997;Zademach & Rodríguez-Pose, 2009). Existing studies have indicated that regional integration and industrial or technological relatedness across regions tend to encourage inter-regional corporate investment and M&As (Chapman, 1999;Ellwanger & Boschma, 2015;McCarthy & Dolfsma, 2015). Researchers also found that M&A partnering seems to be motivated by inter-regional similarities in the institutional setting and cultural contexts, such as language and custom, legal system, business environment, and political contexts (Buckley et al, 2016;Du & Boateng, 2015;Hur et al, 2011).…”

European Union financial integration, a geography perspective

“…Regardless, such a co‐dependence was emphasized to justify the politics of monetary integration (idem, Bieling, ; Jabko, ). The prospect of a single currency would decrease cross‐border transaction costs (Tickell, ), increase industrial transnationalization (McCarthy & Dolfsma, ), and was expected to culminate in consolidation of financial institutions (Dow, ). These expectations fed into a bank merger wave in the late 1990s (Bayoumi, , pp.…”

False Friends? On the Effect of Bureaucracy, Informality, Corruption and Conflict in Ukraine on Foreign and Domestic Acquisitions

“…We consider these effects on the number of mergers and acquisitions for two reasons. Firstly, mergers and acquisitions are an international market McCarthy and Aalbers 2016), and research shows that they are sensitive to institutional changes (e.g., McCarthy and Dolfsma 2015). As such, mergers and acquisitions provide policy makers with insights into the market's views of the changes that a country makes.…”