Multilatinas and Value Creation from Cross-Border Acquisitions: An Event Study Approach

Résumé 0

"The central proposi tion of this paper is to assess the performance of cross - border acquisitions made by Multilatinas . Applying the event study method to a sample of 607 announcements of acquisitions during the period 1989 - 2011 by 182 Multilatinas from Argentina, Brazil, Chil e, Colombia, Mexico, Peru and Venezuela, we conclude that : ( a) on average, these announcements have a neutral impact on the short - term returns to acquiring companies’ shareholders ; ( b) cross - sectional analysis reveals that relative size of the deals have a negative and significant effect on investors’ reactions and ; ( c) unlike the institutional distance between home and host countries, cultural distance matters , since it has a negative a n d significant effect on the perceptions that investors have regarding the expected economic impact of acquirers’ cross - border merger and acquisition ( M&A ) decisions. Inasmuch as the market rationality assumption that underlies the event study method has been questioned , f uture research lines are proposed in order to search f or alternative long - term performance constructs concerning M&A processes in general that can : (a ) shed light on the reality of value creation (and destruction) from cross - border acquisitions made by Multilatinas ; and (b ) contribute to strategy, internation al business and M&A theories and practice."