Cross-border mergers &amp; acquisitions with financially constrained owners

Berg, Aron; Norbäck, Pehr Johan; Persson, Lars

doi:10.1007/s10290-017-0281-5

Cited by 1 publication

(6 citation statements)

References 43 publications

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“…Still, the data situation is likely to improve in the near future. MULTINATIONAL FIRMS AND PLANT DIVESTITURE 833 again is a simplified version of Berg et al (2012). In contrast to their model, we take the identity of the buyer and seller as exogenous, and we only look at discrete investments.…”

Section: Resultsmentioning

confidence: 99%

“…Norbäck, A. Tekin-Koru, and A. Waldkirch be sold. As shown in Berg et al (2012), this will be true even in a setting with product market competition, since the acquisition price will adjust to take into account how firms are affected in the post-acquisition market.…”

Section: Resultsmentioning

confidence: 99%

“…The main assumption in Berg et al () is that a firm's borrowing cost is decreasing in its cash holdings. Thus, divesting assets is a method to finance investments in remaining assets or in new assets, since the selling firm not only gets cash to finance the new investments, but will also reduce its investment cost from increased cash holdings.…”

Section: Sketch Of a Modelmentioning

confidence: 99%

“…To guide our empirical analysis we sketch out a simple model that builds on Berg et al () . This simple model generates two results that we take as a starting point for the empirical analysis.…”

Section: Introductionmentioning

confidence: 99%

“…Proposition builds on Lemma 1 in Berg et al () where the size of the investment is endogenous and where the roles as buyer and seller are endogenously determined.…”

mentioning

confidence: 99%

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Multinational Firms and Plant Divestiture

Norbäck

Tekin‐Koru

Waldkirch

2015

Rev International Economics

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Multinational enterprises frequently start, acquire, close and divest a¢ liates. There is a large literature on restructuring, which focuses on start-ups and acquisitions. The empirical literature on plant survival usually provides evidence from a single country. In contrast, this paper uses detailed survey data of Swedish multinationals to examine the characteristics that result in plant divestiture at the a¢ liate, …rm, industry, country and regional level. We provide propositions drawn on a straightforward model from Berg et al (2012) in which the primary motive to divest an a¢ liate is to …nance other investments in the network of the MNC. In line with conclusions from our model, we …nd that larger a¢ liates are more likely to be divested and these a¢ liates are small relative to the other operations of the …rm in the same country or region. We also …nd that divestiture begets divestiture, but acquisition does not, thus casting doubt on the notion of footloose multinationals. Several …rm, industry and country characteristics also matter.

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Sketch Of a Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

“…Proposition builds on Lemma 1 in Berg et al () where the size of the investment is endogenous and where the roles as buyer and seller are endogenously determined.…”

mentioning

confidence: 99%

See 3 more Smart Citations