Value Creation Through International Acquisitions In A World Of One-Way Globalization: Toward A New Paradigm

Abstract

Cross-border mergers and acquisitions have typically resulted in relatively poor returns for acquiring firm shareholders. Yet subsets from the universe of M&A deals have demonstrated positive returns, leaving open the question of determining the characteristics of cross-border deals that would be conducive to wealth formation. We use a study of large-capitalization firms as a springboard to investigating the performance of differentiated large-scale international acquisitions. We note that large acquisitions take place in a world frequently characterized by one-way rather than reciprocal globalization. This ongoing study seeks to identify determinants of value creation subject to imbalances in how the benefits from transnational business processes are distributed among the countries which accommodate the transactions.