Gains from Mergers and Acquisitions Around the World : New Evidence

Using a global M&A data set, this paper provides evidence that the empirical observations relating public acquisitions to, at best, zero abnormal returns, and their stock-financed subset to negative abnormal returns for acquiring firms around the deal announcement are not unanimous across countries. Acquirers beyond the most competitive takeover markets (the U.S., U.K., and Canada) pay lower premia and realize gains, on average, while share-for-share offers are at least non-value destroying for their shareholders. In contrast, target shareholders within these markets gain significantly less, implying that the benefits generated are more evenly split between the involved parties. The degree of competition in the market for corporate control is a robust determinant of shareholder gains and takeover premia after controlling for deal, firm characteristics, and other differences across countries