Cross-border mergers and acquisitions and default risk

Abstract

We examine the impact of cross-border mergers on acquirers' post-merger default risk using a sample of 375 US acquiring firms from 1997 to 2011. After controlling for cultural, institutional, geographic and managerial factors between the US and target firm countries, we find that on average, cross-border transactions decrease the level of default risk of the acquiring firms. Our results are consistent with the asymmetric information hypothesis that managers take advantage of the overvaluation and volatility of their stock prices. We also observe that the geographic distance and industrial relatedness play significant roles in affecting post-merger default risk but find limited evidence indicating the relevance of institutional environments and cultural factors on changes in default risk. We find that option compensation increases the risk-taking motives of managers in high risk firms. Another significant finding is that managers use cross-border mergers to manage the extant risk of their firms.

Post-M&A Performance and Failure: Implications of Time until Deal Completion

“…The literature has largely ignored the time it takes until a deal closes as a determinant of performance and a risk indicator of failure probability. Studies have excluded the effect of the time it takes for a deal to close by restricting samples to an arbitrarily set time period [4,5]. However, arbitrarily setting the interval to one year or any other interval is not only subjective, but can obscure important information implications of the time interval between deal announcement and deal closing.…”

A kereskedelmi szektor felvásárlásainak hatása a csődkockázat mértékére és a hatékonyságra

“…Azok a cégek, amelyek az egyesülést megelőzően kockázatosnak minősültek, a tranzakciók követően még magasabb csődkockázatot mutattak. Ezzel ellentétes eredményre jutott Koerniadi et al (2015) tanulmánya, amely szerint a határon-átnyúló tranzakciókban résztvevő felvásárló társaságok csődkockázata csökkent. A szerzők szerint az eredményt leginkább az magyarázza, hogy a felvásárlók azonos ágazatban lévő céltársaságokat vásároltak fel.…”

Improving merger and acquisition decision-making using fuzzy logic and simulation

“…The process of M&A generally triggers by realizing the needs of M&A or recognizing opportunities for business growth by identifying a target company. 14 Generally, there are eight major steps, namely M&A needs recognition, M&A formation, 15 capital structuring and negotiations, 16 documentation, Due Diligence, 17 ownership rights protection, 18 and dispute resolution. 19…”