Do cross-border mergers-acquisitions in mature and emerging markets create similar value?

Abstract

Purpose

The purpose of this paper is to compare the value creation of cross-border mergers and acquisitions (M&As) in mature and emerging markets.

Design/methodology/approach

The empirical study is based on a sample of 285 cross-border M&As announced between 2010 and 2012 and completed by companies of the French SBF 120 index in 54 countries.

Findings

The statistical analysis shows how financial markets react before and after the announcement of M&As. The obtained findings highlight significant differences: the reaction of financial markets before the announcement is moderately positive for M&As in mature economies, but negative for those in emerging economies; their reaction after the announcement is clearly positive for M&As in mature markets and moderately positive for those in emerging markets.

Research limitations/implications

Future studies on M&A value creation should differentiate mature and emerging economies and adopt a more in-depth classification of target countries.

Practical implications

This research emphasizes the necessity to consider country-specific factors for M&A value creation.

Originality/value

The empirical study is based on a sample of French acquirers, who account for 3 percent of the volume and value of M&As in the world and whose operations are rarely studied in the literature. The authors compare the reaction of financial markets before and after the announcement of M&As conducted in mature and emerging economies.

Citation

Chalencon, L. and Mayrhofer, U. (2018), "Do cross-border mergers-acquisitions in mature and emerging markets create similar value?", Journal of Organizational Change Management, Vol. 31 No. 4, pp. 944-958. https://doi.org/10.1108/JOCM-03-2017-0091