Thirty Years of Cross-Border Mergers and Acquisitions and Value Creation: A Review and Future Directions

Cross-border mergers and acquisitions have typically resulted in relatively poor returns for acquiring firm shareholders. Yet subsets from the universe of M&A deals have demonstrated positive returns, leaving open the question of determining the characteristics of cross-border deals that would be conducive to wealth formation. We use a study of large-capitalization firms as a springboard to investigating the performance of differentiated large-scale international acquisitions. We note that large acquisitions take place in a world frequently characterized by one-way rather than reciprocal globalization. This ongoing study seeks to identify determinants of value creation subject to imbalances in how the benefits from transnational business processes are distributed among the countries which accommodate the transactions.

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Cross-Border Mergers and Acquisitions in the Oil and Gas Industry: An Overview

Energies ◽

10.3390/en13215580 ◽

2020 ◽

Vol 13 (21) ◽

pp. 5580

Author(s):

Şevkat Özgür ◽

Franz Wirl

Keyword(s):

Mergers And Acquisitions ◽

Oil And Gas ◽

Oil And Gas Industry ◽

Resource Base ◽

Future Directions ◽

Gas Industry ◽

Cross Border ◽

Recent Trends ◽

Specific Factors ◽

Legal Constraints

This paper surveys cross-border oil and gas mergers and acquisitions (M&A) transactions in recent years using a large sample of 18,179 transactions announced over the period 2000–2018. M&A activities depend on economic fundamentals, but also on sector specifics and this particularly holds true for the oil and gas industry. Therefore, we have added sector specific to the standard economic explanations of mergers and acquisitions by accounting for institutions, resources, and politics. Indeed, our outputs show that industry-specific factors seem much more important in motivating M&A in the oil and gas industry than the familiar and researched economic conditions. In particular, the pattern of cross-border M&A is almost unrelated to opportunities offered by the resource base in different countries while political, institutional, and legal constraints shape the directions of cross-border M&A. The research covers the recent trends in the oil and gas M&A transactions, strengthens the understanding of various dynamics and sheds light on the potential future directions of the M&A market in the oil and gas industry.

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Value creation through cross-border mergers and acquisitions by the Indian pharmaceutical firms

Journal of Strategy and Management ◽

10.1108/jsma-03-2013-0017 ◽

2014 ◽

Vol 7 (1) ◽

pp. 49-63 ◽

Cited By ~ 2

Author(s):

Ritu Srivastava ◽

Ajai Prakash

Keyword(s):

Pharmaceutical Industry ◽

Mergers And Acquisitions ◽

Value Creation ◽

Abnormal Returns ◽

Content Type ◽

Mean Values ◽

Pharmaceutical Firms ◽

Cross Border ◽

Ex Ante ◽

The Mean

Purpose – Cross-border mergers and acquisitions (M&A) have given the opportunity to the emerging market multinationals to add value while implementing the strategy of internationalization. The Indian pharmaceutical firms are also adopting this strategy and the purpose of this paper is to determine the evidence of value creation for their international M&A activity. Design/methodology/approach – In total, 30 cross-border M&A are examined for value addition through accounting (PAT as percentage of net worth, PAT as percentage of capital employed, research and development (R&D) expenses as percentage of operating expenses) and shareholder return (cumulative abnormal returns) measures of the acquirer firm ex-ante and ex-post M&A. The difference in mean values of the variables after the M&A event is determined through Student's t-test. The time horizon selected for accounting variables was five years and the abnormal stock market returns were calculated using domestic market model with the event window being 40 days. Findings – The results indicate no statistically significant difference in the mean values of all the measures except R&D expenses as percentage of operating expenses for the acquirer Indian firms before and after the M&A event. The mean values of abnormal returns were less than those before the M&A activity. Research limitations/implications – The study does not include a control group of Indian firms engaged wholly in domestic M&A activity or those firms who have not merged or acquired at all. Practical implications – The study may point out toward no significant ex-ante value creation in terms of the selected profit measures but it suggests the probability of the strategy being adopted as a solution to problems like the transfer of tacit knowledge in case of technology led competitive advantages in the pharmaceutical industry and the rise of R&D activity. Originality/value – The Indian pharmaceutical industry has been experiencing waves of international M&A activity since 2005 after the implementation of Product patent Act, 2005. However, little research has been done on the sector to understand the value creating implications of such corporate strategic decisions.

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Relationship between Cross-Border Mergers and Acquisitions and International Trade: The Case of Russian Pharmaceutical Industry

Экономическая наука современной России ◽

10.33293/1609-1442-2020-1(88)-81-94 ◽

2020 ◽

pp. 81-94

Author(s):

Alexandra V. Chugunova ◽

Olga A. Klochko

Keyword(s):

International Trade ◽

Mergers And Acquisitions ◽

Volume Growth ◽

Pharmaceutical Products ◽

Pharmaceutical Companies ◽

Cross Border ◽

Export Volume ◽

Relationship Of ◽

Geographical Diversification ◽

The Relationship

This research studies the relationship of cross-border mergers and acquisitions to international trade through the lens of Russian pharmaceutical market. To this aim, the study analyses the woks of foreign economists dedicated to evaluating the link between foreign direct investment and international trade, and the influence of mergers and acquisitions on countries’ export and import flows. The research also presents a correlation analysis between the volume of Russian pharmaceutical exports and imports and cross-border deals performed by foreign pharmaceutical companies in Russia. We characterize these deals and conduct a comparative analysis of the regional structure of Russian pharmaceutical exports and imports as well as of the countries of origin of buyers in cross-border mergers and acquisitions. The results of the analysis indicate a positive relationship between cross-border mergers and acquisitions and Russian pharmaceutical exports, which is reflected in the export volume growth and its geographical diversification. However, it is outlined that particular problems of the industry hinder the amelioration of Russian positions in international exports. Similarly, the relationship between cross-border deals and Russian imports is positive: the major pharmaceutical products supply flow occurs from the countries of origin of buyers in cross-border mergers and acquisitions conducted in the Russian pharmaceutical sector.

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