Cross-border mergers and acquisitions using ADRs as consideration
Date of Original Version
This paper examines why the use of American Depositary Receipts as the means of consideration in cross-border mergers and acquisitions introduces issues distinct from those associated with the use of equity consideration in purely domestic acquisitions. We find that acquirers' returns exhibit considerable variation. The implications of varying institutional attributes of transactions are examined and we show how different sub-samples vary in terms of transactional details and valuation consequences. Overall, we find acquirers experience less negative outcomes than acquirers using equity as consideration in domestic transactions; furthermore acquirer's performance is better when the target is in a different industry. © 2007 Elsevier Inc. All rights reserved.
International Review of Economics and Finance
Owers, James E., Bing Xuan Lin, and Ronald C. Rogers. "Cross-border mergers and acquisitions using ADRs as consideration." International Review of Economics and Finance 17, 2 (2008): 306-318. doi:10.1016/j.iref.2007.05.009.