Target Company Cross-Border Effects in Acquisitions into the UK

26 Pages Posted: 13 Apr 2004

See all articles by Jo Danbolt

Jo Danbolt

University of Edinburgh Business School


We analyse the abnormal returns to target shareholders in cross-border and domestic acquisitions of UK companies. The cross-border effect during the bid month is small (0.84%), although cross-border targets gain significantly more than domestic targets during the months surrounding the bid. We find no evidence for the level of abnormal returns in cross-border acquisitions to be associated with market access or exchange rate effects, and only limited support for an international diversification effect. However, the cross-border effect appears to be associated with significant payment effects, and there is no significant residual cross-border effect once various bid characteristics are controlled for.

Keywords: Mergers and acquisitions, shareholder returns, cross-border, differential

JEL Classification: G34, G14, G15

Suggested Citation

Danbolt, Jo, Target Company Cross-Border Effects in Acquisitions into the UK. Available at SSRN:

Jo Danbolt (Contact Author)

University of Edinburgh Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS

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