The wealth effects of acquiring foreign government-owned corporations: evidence from US-listed acquirers in cross-border mergers and acquisitions

• Autores: Surendranath Jory, Thanh Ngo
• Localización: Applied financial economics, ISSN 0960-3107, Vol. 21, Nº. 22-24, 2011, págs. 1859-1872
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • We study the short- and long-term effects of acquiring targets that are government owned, which we refer to as Government-Owned Corporations (GOCs). Our sample of acquirers consists of US-listed public corporations, while the targets are GOCs based outside the US. In comparison to acquisitions of non-GOCs, we find that the wealth effects of acquiring GOCs are more favourable. We also find that GOC targets located in countries with poorer governance characteristics positively impact the shareholders� wealth of the acquirer. Our evidence suggests that acquirers of foreign GOCs exploit target country governance imperfections to their advantage.