Stock Announcement Effects of UK Cross-border and National M&As for 1998-2012

The recent trend of takeover bids is large deal and globalization. Cross-border transactions have increased rapidly these years. The expanded and diversified market offers more investment opportunities as well as more uncertain risks. The objective of this study is to show the impacts of different factors on shareholder wealth of bidders distinguishing national and cross-border transactions around the announcement date. The sample is of 400 mergers or acquisitions over the period of 1998-2012 by UK public firms who have successfully completed the transactions. Using the methodology of event study, this paper shows that national deals earn significantly more than cross-border deals, of 1 percent difference within 3 days event window, and of 0.7 percent within 5 days event window. To partition the two groups further, this paper also finds that industry diversification, payment method, relative size, target type differentiates the abnormal returns to the bidders