Cross-Border M&As by Swedish Firms

Sammanfattning: Title: Cross-Border M&As by Swedish Firms Author: Filip Izgi Supervisor: Ola Bengtsson Purpose: The primary purpose of this study is to examine acquiring firm’s abnormal behavior of cross-border and domestic M&A announcements, as a factor of cultural differences. The secondary purpose is to investigate if abnormal behavior is influenced by pre-determined control-variables: method of payment and industry. Method: The study was conducted through a short-term Event Study. I investigated a total of 86 diversified, domestic and cross-border, acquisition announcements between the years 2000 – 2012. Conclusion: The study demonstrates that M&A announcements have different effects on stock performance depending on cultural differences, method of payment and the industry the corporations operate in. The result aren’t statistically significant but they are highly consistent with theories such as the pecking order theory, Hofstede’s cultural dimensions and the market efficiency hypothesis were domestic acquisitions’ performs better than cross-border acquisitions, cash acquisitions performs better than stock acquisitions and the industry shows a clear indication of inefficient markets.