Swedish Acquirers' Cross-Border M&A Performance : A comparison with domestic M&As and analysis of determinants in foreign M&As

Sammanfattning

Cross-border mergers and acquisitions (CBM&A) is a common phenomenon worldwide. In Sweden, approximately 63% of all M&As in 2024 were cross-border. However, there is an absence of a common understanding of acquirers’ performance in CBM&As. Our study thus aims to explore the impact of CBM&As on the performance of Swedish public acquirers. Firstly, we investigate if the acquirers’ performance differs in CBM&As and domestic M&As and secondly, we study which determinants influence the acquirers’ performance in CBM&As. Acquirers’ short-term performance is measured as the cumulative abnormal stock returns in the days surrounding the M&A announcement. Acquirers’ long-term performance is measured as the change in abnormal residual earnings post deal completion. Our findings reveal that although the immediate stock returns are higher in CBM&As than in domestic M&As, this difference diminish over time and is neither reflected in the long-term performance. Furthermore, we find that neither the national cultural distance between the merged firms, nor the acquirers’ prior M&A experience, influence acquirers’ CBM&A performance. Contrarily, related resource-profiles of the merged firms, cross-country variations in resources and capabilities and the risk for agency problems in the acquisition process, sporadically serve as determinants of acquirers’ performance in CBM&As.