The effectivenss of cross border M&A deals between BRIC and developed countries

<p>The aim of the paper is to analyze the effectiveness of cross border mergers and acquisitions between BRIC (as acquirers) and developed counties &ndash; the USA and the European Union (as targets), which is determined by volume and direction of the effect of deal announcement on indicator of efficiency of buyer firm. The logic of this paper is organized as follows. Chapter 1 is devoted to the empirical studies of existing historical studies which contain appraisal of changes in financial indicators before and after a deal. In the second part, the methodology and hypothesis of this paper is discussed. The third chapter describes the sample is used in research and major findings of the study. In conclusion main results and the direction of future work were represented.</p><p>In this paper the effectiveness among this type of deals during the period from 2003 to 2014 is investigated. In the empirical research it was analyzed 94 deals using abnormal return model. The results showed the positive relationship between announcement of the deal and the value of buyer. Moreover, in the empirical study hypothesis about positive correlation between crisis, diversification and firm value of buyer were tested. All hypotheses were not rejected. Moreover, results represent that on the studied sample deals which were announced after crisis were more efficient on average than deals which were announced after crisis. It also was indentified that diversification deals show on average the greater value of yield than focused deals. The study examines M&amp;A diversification more detail. The results showed that on average diversification deals in which the acquirer has already had experience in transactions of a certain type are more efficient &nbsp;than if the company don&rsquo;t had that diversification experience at all.&nbsp;</p>