"The vast majority of cross-border mergers involve private firms outside of the United States. We analyze a sample of 56,978 cross-border mergers between 1990 and 2007. We find that geography, the quality of accounting disclosure, and bilateral trade increase the likelihood of mergers between two countries. Valuation appears to play a role in motivating mergers: firms in countries whose stock market has increased in value, whose currency has recently appreciated, and that have a relatively high market-to-book value tend to be purchasers, while firms from weaker-performing economies tend to be targets."
"Determinants of Cross-Border Mergers and Acquisitions", Isil Erel, Rose Liao and Michael Weisbach The Journal of Finance, June 2012
A lot has changed since 2007 but we still see the importance of many of these same factors. A recent Wall Street Journal notes how the dollars strength is causing a resurgence of foreign deals. (Of particular interest to our Acquisition Finance Course coming up in Amsterdam this December, the article notes that "FedEx cited the stronger dollar in its pending $4.8 billion takeover of Dutch carrier TNT Express N V"). Notice the graph below. U.S. takeovers of foreign companies are on track to top even last year's record volume.
All the best,
Ralph
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