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  • Performance of Acquisitions of Private and Public Companies in Cross-Border M&A Deals Initiated by Companies from BRICS Countries

Educational Programme
Final Grade
Year of Graduation
Nataliya Medvedeva
Performance of Acquisitions of Private and Public Companies in Cross-Border M&A Deals Initiated by Companies from BRICS Countries
Strategic Corporate Finance
(Master’s programme)
The work examines performance of cross-border acquisitions of private and public targets by companies from BRICS countries.

Univariate analysis shows that acquiring firms generate higher returns when purchasing targets in lower-liquidity countries. In contrast, the level of transparency in the target firm country causes little difference in the acquirer returns. An examination of the number of targets reveals that when firms acquire targets in low-transparency countries, acquirers are more likely to buy private targets rather than public targets. These results together indicate that while country liquidity plays an important role in affecting acquirer returns, country transparency plays as a key determinant of selecting a target type. The regression results from self selection models are in general consistent with the results from univariate tests. The return equation of the self selection model shows that after accounting for the endogeneity problem, country liquidity is no longer significant and hence is not a key determinant of the acquirer returns. This result offers evidence on the weak role of country liquidity in explaining the private target discounts in cross-border acquisitions.

Results, presented the study may be interesting to the Board of Directors and Management of companies from BRICS countries in the decision-making process in cross-border mergers and acquisitions. Identified determinants of performance of acquisitions of private and public companies in cross-border M&A deals initiated by companies from BRICS countries (liquidity and transparency) and choice of private or public target company will ensure improvement of the quality of justification the financial strategies of cross-border mergers and acquisitions

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