International Mergers and Acquisitions Activity Since 1990

It is now a well-know fact that mergers and acquisitions activity comes in waves. The most recent wave, the 5th takeover wave of the 1990s, was characterized by an unprecedented number of corporate restructurings in terms of mergers and acquisitions (M&As), public-to-private transactions, spin-offs and divestitures, and leveraged recapitalizations. Following the collapse of the stock market in March 2000, M&A activity slumped dramatically, but this pause ended in the second half of 2004 when takeover deals occurred again quite frequently. Indeed, some observers wonder whether the 6th takeover wave has started. The takeover wave in the 1990s was particularly remarkable in terms of size and geographical dispersion. For the first time, Continental European firms were as eager to participate as their US and UK counterparts, and M&A activity in Europe hit levels similar to those experienced in the US. Due to its financial impact and the unprecedented activity in Continental Europe, the 5th takeover wave of the 1990s and recent takeover activity (in biotech, utilities, pharmaceuticals) have triggered a great deal of interesting academic research. This volume brings together a selection of insightful papers. An impressive group of international authors address the following themes: takeover regulation; the cyclical pattern of the M&A markets and probable causes and effects; methods to determine the performance of success of M&A actions; cross border deals; means of payment and its effects; studies of hostile bids; high leverage takeovers and delistings.

Table of Contents

Chapter 1 Understanding mergers and acquisitions Greg. N. Gregoriou and Luc Renneboog

Chapter 2 Cross-border mergers and acquisitions: the facts as a guide for international economics Steven Brakman, Harry Garretsen and Charles van Marrewijk

Chapter 3 Searching for alpha: which acquisitions create value? Manolis Liodakis, and Che Pang

Chapter 4 Long-term operating performance in European mergers and acquisitions Marina Martynova, Sjoerd Oosting and Luc Renneboog

Chapter 5 Bondholder wealth effects in mergers and acquisitions Luc Renneboog and Peter G. Szilagyi

Chapter 6 Mix and match facilities and loan notes in acquisitions Marc Goergen and Jane Frecknall-Hughes

Chapter 7 The effect of merger laws on merger activity: International evidence Arturo Bris, Christos Cabolis, and Vanessa Janowski

Chapter 8 The governance motive in cross-border mergers and acquisitions Stefano Rossi and Paolo Volpin

Chapter 9 Corporate governance convergence through cross-border mergers: the case of Aventis Arturo Bris and Christos Cabolis

Chapter 10 Whither hostility? William Bratton

Chapter 11 Corporate governance and acquisitions: Acquirer wealth effects in the Netherlands Abe de Jong, Marieke van der Poel and Michiel Wolfswinkel

Chapter 12 EU takeover regulation and the one share one vote controversy Arman Khachaturyan and Joseph A. McCahery

Chapter 13 Opportunities in the M&A aftermarket: squeezing out and selling out Christoph Van der Elst and Lientje Van den Steen

Chapter 14 Mergers and acquisitions in IPO markets: evidence from Germany David B. Audretsch and Erik E. Lehmann

Chapter 15 Reverse mergers in the UK: listed targets and private acquirers Peter Roosenboom and Willem Schramade

Chapter 16 Efficiency and merger activity in the insurance industry Fabio Bertoni, Annalisa Croce and Greg N. Gregoriou

Chapter 17 The profile of venture capital exits in Canada Douglas Cumming and Sofia Johan

Chapter 18 Executive compensation and managerial overconfidence: Impact on risk taking and shareholder value in corporate acquisitions Sudi Sudarsanam and Jian Huang

Chapter 19 Opportunistic accounting practices around stock financed mergers in Spain María J. Pastor-Llorca and Francisco Poveda-Fuente

Chapter 20 Mergers between energy firms in Europe: champions and markets Francesc Trillas

Chapter 21 Valuation methods and German merger practice Wolfgang Breuer, Martin Jonas, Klaus Mark

Chapter 22 The impact of cross border mergers and acquisitions on financial analysts’ forecasts: evidence from the Canadian stock market Alain Coën, Aurélie Desfleurs and Claude Francoeur

Chapter 23 Size does matter – firm size and the gains from acquisitions on the Dutch market Roman Kräussl and Michel Topper

Chapter 24 Share buy-backs, institutional investors and corporate control Paul U. Ali