Multinational corporations use cross-border mergers and acquisitions (M&As) as an important restructuring strategy. Multiple motivations exist for cross-border M&As. Most studies focus on returns related to short-term announcements of acquiring and target firms in cross-border M&As and find significant variations in the performance outcomes. The results are mainly driven by market segmentation, the competitiveness of the corporate control market, and advantages associated with intangible assets. Long-term studies on cross-border M&As are limited and show mixed impact on acquiring and targeting firm performance. Information asymmetry, cultural barriers, and cross-country corporate governance all contribute to the complexity of the cross-border M&A activities. This chapter reviews the impact of these factors on acquisition performance.
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