Date of this Version
Journal of Financial and Quantitative Analysis
We present large sample evidence on the performance of domestic and U.S. (foreign) bidder firms acquiring Canadian targets. Domestic bidders earn significantly positive average announcement period abnormal returns, while U.S. bidder returns are indistinguishable from zero. Measures of pre- and post-acquisition abnormal accounting performance are also consistent with a superior domestic bidder performance. Domestic bidder announcement returns are, on average, greatest for offers involving stock payment and for the bidders with the smallest equity size relative to the target. Neither direct foreign investment controls, horizontal product market relationships, nor acquisition propensities explain why domestic bidders outperform their U.S. competitors.
This article has been published in a revised form in Journal of Financial and Quantitative Analysis https://doi.org/10.2307/2676236. This version is free to view and download for private research and study only. Not for re-distribution, re-sale or use in derivative works. © Cambridge University Press.
Eckbo, B. E., & Thorburn, K. S. (2000). Gains to Bidder Firms Revisited: Domestic and Foreign Acquisitions in Canada. Journal of Financial and Quantitative Analysis, 35 (1), 1-25. http://dx.doi.org/10.2307/2676236
Date Posted: 27 November 2017
This document has been peer reviewed.