Cross-Border Mergers and Acquisitions and Country Risk Ratings: Evidence from U.S. Financials

This study reports how country risk and macroeconomic conditions influence the wealth gains of U.S. financial firms involved in international mergers and takeovers. The findings suggest that U.S. financials experience weakly significant wealth gains around announcement date. The wealth gains are significant for takeovers in Latin America. There are also differences in wealth gains of subsector affiliations of financial firms. While banks experiencing wealth loss, both insurance and investment services firms having significant wealth gains. The country risk, including economic, political, and financial risk ratings, help to explain the wealth gains to financial bidders

Performance of Emerging Market Diversified Equity Funds

http://www.sobiad.org/ejournals/journal_IJSS/arhieves/2012_2/halil_kiymaz.pd

The impact of country risk ratings on U.S. firms in large cross-border acquisitions

This study investigates the impact of country risk ratings on the wealth gains to large U.S. bidders involved in cross-border acquisitions. The findings indicate that U.S. bidders experience positive wealth gains during the merger announcements, though this is concentrated in transactions involving European targets. There are also differences in wealth gains to bidders with respect to industry classification and location of foreign targets. The country risk factors including economic, political, and financial risk ratings all play a significant role in explaining the wealth gains to bidders. Furthermore, the wealth gains are higher for the firms with acquisitions in developed countries and are significantly related to GNP growth rate.International mergers and acquisitions Country risk Wealth effects