Shareholder Wealth Effects of Domestic versus Cross-Border Acquisitions: An Analysis of the Ten Highest Trading Countries in Europe

This paper examines the announcement, the (long-term) post-acquisition share returns, and the return on assets of acquisitions in the ten highest trading countries in Europe. Hereby, cross-border acquisitions are compared to domestic acquisitions over the period of 1993 to 2018. Overall, the results show no significant difference between cross-border acquisitions a domestic acquisition, not in announcement, long-term returns, or return on assets. In cross-border acquisitions, it does not matter if the target firm is in one of the ten European countries with the highest trading volume or not. This also applies to European targets, as a cross-border acquisition of a European target is not significantly different from an acquisition not in Europe. Also, comparing between regions of Europe of the target, no distinction is found between them.