Wealth effects for acquirers and divestors related to foreign divested assets |
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| Institution: | 1. Department of Finance, Bentley College, Waltham, MA 02154-4705, USA;2. Department of Finance, Southern Illinois University at Carbondale, Carbondale, IL 62901-4626, USA;3. Department of Accounting and Finance, University of New Hampshire, Durham, NH 03824-3593, USA;1. Department of Radiation Oncology, Sun Yat-sen University Cancer Centre, State Key Laboratory of Oncology in South China, Collaborative Innovation Centre of Cancer Medicine, Guangzhou, People''s Republic of China;7. Department of Nasopharyngeal Carcinoma, Sun Yat-sen University Cancer Centre, State Key Laboratory of Oncology in South China, Collaborative Innovation Centre of Cancer Medicine, Guangzhou, People''s Republic of China;11. Department of Medical Oncology, Sun Yat-sen University Cancer Centre, State Key Laboratory of Oncology in South China, Collaborative Innovation Centre of Cancer Medicine, Guangzhou, People''s Republic of China;12. Clinical Trials Centre, Sun Yat-sen University Cancer Centre, State Key Laboratory of Oncology in South China, Collaborative Innovation Centre of Cancer Medicine, Guangzhou, People''s Republic of China;2. Department of Clinical Oncology, The University of Hong Kong-Shenzhen Hospital, Shenzhen, People''s Republic of China;3. Department of Medical Oncology, Antwerp University Hospital, Edegem, Belgium;4. Department of Radiation Oncology, National Cancer Centre Singapore, Singapore;6. Department of Radiation Oncology, University of Toronto; Ontario Cancer Institute, University Health Network, Toronto, Ontario, Canada;5. Department of Radiation Oncology, University of Michigan, Ann Arbor, Michigan;8. Department of Medical Statistics and Epidemiology, School of Public Health, Sun Yat-sen University, Guangzhou, People''s Republic of China;1. Institute for International Business, WU Vienna, Welthandelsplatz 1, Building D1, 1020, Vienna, Austria;2. Unicredit SpA, Vienna, Austria;1. Vietnam National University, International School, 144 Xuan Thuy, Cau Giay, Hanoi, Vietnam;2. Department of Global Economics and Management, Faculty of Economics and Business, University of Groningen, Nettelbosje 2, 9747 AE Groningen, The Netherlands;3. School of Economics and Business, VU University Amsterdam, De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands;1. Department of Strategy and International Business, Surrey Business School, University of Surrey, Guildford, Surrey, GU2 7XH, United Kingdom;2. Department of International Business, Korea University Business School, Korea University, Anam-dong, Seongbuk-gu, Seoul, 136-701, Republic of Korea;1. Jackstädt Center of Entrepreneurship and Innovation Research, University of Wuppertal, Gaußstraße 20, 42119 Wuppertal, Germany;2. RWI – Leibniz-Institut für Wirtschaftsforschung, Hohenzollernstrasse 1-3, 45128 Essen, Germany;3. Hochschule Stralsund – University of Applied Sciences, Zur Schwedenschanze 15, 18435 Stralsund, Germany |
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| Abstract: | This study examines acquisitions of foreign divested assets by U.S. firms. The results indicate that the excess returns to these acquisitions is a significant 0.48%, suggesting that capital markets perceive potential synergies from the effective utilization and strategic management of these assets by U.S. companies. The wealth effects to divestors of these foreign assets is 0.65%, significant at the 1% level, indicating that firms benefit from reducing their geographic scope of operations. We further examine excess returns to acquirers, and we find that several firm-specific characteristics foster anticipation of positive performance gains resulting from the acquisition of divested assets in foreign countries. Similar results are observed for the divesting firms also. Analysis of long horizon performance provides weak indication that performance of divesting firms improves subsequent to the divestment. |
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