Title

Cross-border mergers and acquisitions using ADRs as consideration

Document Type

Article

Date of Original Version

2-21-2008

Abstract

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.

Publication Title

International Review of Economics and Finance

Volume

17

Issue

2

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