TY  - JOUR
AU  - Chari,Anusha
AU  - Ouimet,Paige P.
AU  - Tesar,Linda L.
TI  - Acquiring Control in Emerging Markets: Evidence from the Stock Market
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10872
PY  - 2004
Y2  - November 2004
UR  - http://www.nber.org/papers/w10872
L1  - http://www.nber.org/papers/w10872.pdf
N1  - Author contact info:
Anusha Chari
301 Gardner Hall
CB#3305, Department of Economics
University of North Carolina at Chapel Hill
Chapel Hill, NC 27599
Tel: 919/966-5346
E-Mail: achari@unc.edu

Paige Ouimet
University of North Carolina at Chapel Hill
E-Mail: Paige_Ouimet@kenan-flagler.unc.edu

Linda Tesar
Department of Economics
University of Michigan
Ann Arbor, MI  48109-1220
Tel: 734/763 6015
Fax: 734/764-2769
E-Mail: ltesar@umich.edu
AB  - When firms from developed markets acquire firms in emerging markets, market-capitalization-weighted monthly joint returns show a statistically significant increase of 1.8%. Panel data estimations suggest that the value gains from cross-border M&A transactions stem from the transfer of majority control from emerging-market targets to developed market acquirers' joint returns range from 5.8% to 7.8% when majority control is acquired. Announcement returns for acquirer and target firms estimate the distribution of gains and show a statistically significant increase of 2.4% and 6.9%, respectively. The evidence suggests that the stock market anticipates significant value creation from cross-border transactions that involve emerging-market targets leading to substantial gains for shareholders of both acquirer and target firms.
ER  -