Cc. Markides et Cd. Ittner, SHAREHOLDER BENEFITS FROM CORPORATE INTERNATIONAL DIVERSIFICATION - EVIDENCE FROM UNITED-STATES INTERNATIONAL ACQUISITIONS, Journal of international business studies, 25(2), 1994, pp. 343-366
Do international acquisitions-in contrast to their domestic counterpar
ts-create value for the acquiring firms' shareholders? This study exam
ines the valuation consequences of 276 U.S. international acquisitions
made in the period 1975-1988, and provides direct evidence on the eff
ect of international acquisitions on the market value of U.S. bidding
firms. It is shown that, on average, international acquisitions create
value for the acquiring firms. The study also finds that the value cr
eated is a function of the nature of the acquisition (e.g., related or
unrelated); the nature of the bidding firm's industry (e.g., its conc
entration level and advertising intensity); the nature of the acquirin
g firm (e.g., its prior international experience and its current profi
tability); and the nature of the macroeconomic environment (e.g., tax
regulations and the relative strength of the U.S. dollar).