Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87438
Authors: 
Humphery-Jenner, Mark
Sautner, Zacharias
Suchard, Jo-Ann
Year of Publication: 
2012
Series/Report no.: 
Tinbergen Institute Discussion Paper 12-031/2/DSF32
Abstract: 
We study the role of private equity firms in cross-border mergers and acquisitions. We find that private equity-owned firms are more likely to become targets in crossborderM&A transactions. This effect is particularly strong in transactions where the target or its shareholders actively reach out for an acquirer. On average, cross-borderdeals with private equity-involvement are not associated with higher announcement returns. However, announcement returns are higher if the acquirer is owned by a private equity firm and the target is from a country with poor corporate governance. We provide evidence indicating that the international networks and connections that result from prior cross-border deals can explain why private equity firms create value in such deals. Our findings suggest that private equity firms can help to reduce information asymmetries in certain cross-border M&A deals. We perform several tests to address possible endogeneity concerns.
Subjects: 
Mergers and acquisitions
private equity
information asymmetries
JEL: 
G34
G32
G24
Document Type: 
Working Paper

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