CROSS-BORDER M&A PERFORMANCE FOR ACQUIRERS: EVIDENCE FROM U.S. FIRMS

With increase in global business and ventures into new markets, development of cross border merger and acquisition remains to be one of the key attractive strategy for global firms. This paper studies cross-border merger and acquisition on performance for acquirers as evidence from U.S. firms. This paper addresses various issues regarding effect of cross-border M&A that is conducted by the US acquirers and the factors that influence the short term and long-term stock performance by considering a sample of 313 cross-border deals initiated by US bidding firms from 2010 to 2014.This research utilizes the event study which indicates works towards assessing cross-border merger and acquisition. From the results, it indicates that there is a positive relationship between shareholder’s wealth for bidding in the short run and in the long run, it leads to reduction in the wealth of the shareholders. In the event on day 1 before and after, the stock performance in the company increases the amount of CAR. In the long run, US acquirors in the long run losses in a buy and hold abnormal returns. with performance of stock, through a univariate analysis, it indicates that the target public status in the short term has a negative effect on performance . There are also some of the factors that have an effect on the stock performance and these include the target public status of the firm which is significantly negative in both short and long run performance. Those bidders which acquires firms from the civil-law, those which are culturally distant and good business and institutional environment courtiers gains abnormal returns which is higher in the short run. Those acquisitions that are deemed to create a significantly higher shareholder’s wealth in the long run are paid in form of cash and also between the related industries