Abstract

http://ssrn.com/abstract=1116409
 
 

References (29)



 


 



Foreign Currency Exposure and Hedging: Evidence from Foreign Acquisitions


Söhnke M. Bartram


Warwick Business School - Department of Finance

Natasha Burns


University of Texas at San Antonio - Department of Finance

Jean Helwege


UC Riverside

July 2013


Abstract:     
We study the exchange rate exposures of a sample of firms that undertake large acquisitions of foreign companies. Using data from SEC filings on their foreign operations and derivatives usage, we examine how the exposures change from before to after the acquisition. We find that these deals generally lead to reduced currency exposure, which reflects the fact that most of the firms already have business in the target’s country and the mergers serve as operational hedges. In contrast, we do not find a statistically significant effect for hedging with currency derivatives despite the fact that many of the firms in the sample use such instruments.

Number of Pages in PDF File: 28

Keywords: Exchange Rates, Exposure, Hedging, Derivatives, Mergers, Acquisitions

JEL Classification: G3, F4, F3


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Date posted: April 7, 2008 ; Last revised: March 10, 2014

Suggested Citation

Bartram, Söhnke M. and Burns, Natasha and Helwege, Jean, Foreign Currency Exposure and Hedging: Evidence from Foreign Acquisitions (July 2013). Available at SSRN: http://ssrn.com/abstract=1116409 or http://dx.doi.org/10.2139/ssrn.1116409

Contact Information

Söhnke M. Bartram
Warwick Business School - Department of Finance ( email )
Coventry, CV4 7AL
United Kingdom
+44 (24) 7657 4168 (Phone)
+1 425 952 1070 (Fax)
HOME PAGE: http://go.warwick.ac.uk/sbartram/
Natasha Burns
University of Texas at San Antonio - Department of Finance ( email )
San Antonio, TX 78249
United States
210-458-6838 (Phone)
Jean Helwege (Contact Author)
UC Riverside ( email )
900 University Ave
Riverside, CA 92521
United States
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