Resumen de M&A success of German acquisitions in the US-evidence from capital market and survey data

Alexander Bassen, Dirk Schiereck, Bernd Wübben

• This article examines the value creation of 78 German acquisitions in the US during the period 1990 to 2004. The observed Cumulative Abnormal Returns (CARs) confirm the previous finding that cross-border Mergers and Acquisitions (M&A) activity yields on average wealth gains for shareholders of the acquiring companies. No evidence of a negative cross-border wealth effect could be ascertained, thereby indicating a high international integration of the German capital market. The positive capital market perception of German M&A activities in the US is mainly driven by the acquisition of private targets and equity-settled transactions. The market reactions yield overall congruent results to the responses from surveyed executives of German acquirers. However, bidders' self assessment of US acquisitions is more positive than the capital market valuation, which substantiates manager overconfidence.