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Cross-Border Mergers and Acquisitions: The Role of Private Equity FirmsMark Humphery-JennerUniversity of New South Wales - Australian School of Business; Financial Research Network (FIRN) Zacharias SautnerUniversity of Amsterdam - University of Amsterdam Business School; Duisenberg School of Finance; Tinbergen Institute Jo-Ann SuchardUniversity of New South Wales (UNSW) - School of Banking and Finance; Financial Research Network (FIRN) May 15, 2013 UNSW Australian School of Business Research Paper No. 2012 BFIN 10 2013 Financial Markets & Corporate Governance Conference 25th Australasian Finance and Banking Conference 2012 Abstract: We study the role of private equity firms in cross-border M&A. Private equity-backed firms are more likely to become targets in cross-border transactions. On average, cross-border deals with private equity-involvement are not associated with higher acquirer announcement returns. However, announcement returns are higher if the acquirer is backed by a private equity firm and the target is from a country with poor corporate governance. We document that the international networks of private equity firms can explain why they create value in such deals. Our findings suggest that private equity firms help to reduce information asymmetries in cross-border M&A deals.
Number of Pages in PDF File: 61 Keywords: Mergers and acquisitions, private equity, information asymmetries JEL Classification: G34, G32, G24 working papers seriesDate posted: February 25, 2012 ; Last revised: May 14, 2013Suggested CitationContact Information
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