Title: Acquiring control in emerging markets
Description: "When firms from developed markets acquire firms in emerging markets, market-capitalization-weighted monthly joint returns show a statistically significant increase of 1.8%.  Panel data estimations suggest that the value gains from cross-border M & A transactions stem from the transfer of majority control from emerging-market targets to developed market acquirers %u2013 joint returns range from 5.8% to 7.8% when majority control is acquired.  Announcement returns for acquirer and target firms estimate the distribution of gains and show a statistically significant increase of 2.4% and 6.9%, respectively.  The evidence suggests that the stock market anticipates significant value creation from cross-border transactions that involve emerging-market targets leading to substantial gains for shareholders of both acquirer and target firms"--National Bureau of Economic Research web site.
Subjects: Consolidation and merger of corporations, International business enterprises, Stocks