Multilatinas and Value Creation from Cross-Border Acquisitions: An Event Study Approach
| Autor | Leon Chant Dakessian - Paulo Roberto Feldmann |
| Cargo | Universidade de São Paulo, FEA/USP - Universidade de São Paulo, FEA/USP |
Available online at
http://www.anpad.org.br/bar
BAR, Rio de Janeiro, v. 10, n. 4, art. 5,
pp. 462-489, Oct./Dec. 2013
Multilatinas and Value Creation from Cross-Border Acquisitions:
An Event Study Approach
Leon Chant Dakessian
E-mail address: lcdakessian@usp.br
Universidade de São Paulo – FEA/USP
Av. Prof. Luciano Gualberto, 908, 05508-010, São Paulo, SP, Brazil.
Paulo Roberto Feldmann
E-mail address: feldmann@usp.br
Universidade de São Paulo – FEA/USP
Av. Prof. Luciano Gualberto, 908, 05508-010, São Paulo, SP, Brazil.
Received 29 April 2012; received in revised form 30 April 2013 (this paper has been with the
authors for five revisions); accepted 7 May 2013; published online 1st October 2013.
Multilatinas and Value Creation 463
BAR, Rio de Janeiro, v. 10, n. 4, art. 5, pp. 462-489, Oct./Dec. 2013 www.anpad.org.br/b ar
Abstract
The central propositio n of this pap er is to assess the per formance of cross-bo rder acquisitions made by
Multilatinas. Applying the event study method to a sample of 607 announcements of acquisitions during the
period 1989 -2011 by 182 Multilatinas from Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela,
we conclude that: (a) on average, these announcements have a neutral impact on the short-term returns to
acquiring companies’ shareholders; (b) cross-sectional anal ysis reveals that relative size of the deals have a
negative and significant effect on investors’ reactions and ; (c) unlike the institutional distance between home and
host countries, cultural distance matters, since it has a negative and si gnificant effect on the perceptions that
investors have regarding the expected economic impact of acquirers’ cross-border merger and acquisition
(M&A) decisions. Inasmuch as the market rationality assumption that underlies the event study method has been
questioned, future research lines are proposed in o rder to search for alternative long-term performance constructs
concerning M&A processes in general that can: (a) shed light on the reality of value creation (and destruction)
from cross-bo rder acquisitions made by Multilatinas; and (b) contribute to strategy, international business and
M&A theories and practice.
Key words: internationalization; internalization theory; event study; multilatinas; abnormal returns.
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