The role of leverage in cross-border mergers and acquisitions

We examine the relationship between leverage and cross-border mergers and acquisitions. Using a sample of 85,560 cross-border mergers and acquisitions in 57 countries over the period 1990 to 2010, we find that firms with higher leverage are less likely to acquire foreign targets, whereas firms with lower leverage tend to be targets acquired by foreign firms. These effects are more pronounced in Asian countries than North America. Acquisition premium, the likelihood of all-cash offer and the percentage of cash in the acquisition offer decrease with leverage in cross-border mergers and acquisitions. Foreign targets gain positive abnormal returns in the both short run and long run, while acquirers earn positive abnormal returns in the short-run, but negative returns in the long run. We also find that firms adjust their capital structure after the acquisition by issuing more equity if they were overleveraged, or issuing more debt if they were underleveraged before the acquisition. Our results provide international evidence on how leverage affects managerial decision to acquire foreign targets, payment method and acquisition premium in cross-border mergers and acquisitions. This study shows that the interdependent relationship between investment decision and financing decision exists worldwide.

Cross-border travellers and parallel trade: implications for Asian economies

This paper explores the impact of parallel trade in an export market by cross-border travellers on welfare of the home country in a model with heterogeneous consumers' perceptions. We show that such parallel trade when it is organised trading always hurts the home-country welfare. However, when parallel trade is unorganised trading, it might benefit the home-country welfare provided that the size of the export market is relatively small. Along these lines, we suggest optimal policy responses in the home country to parallel trade by cross-border travellers. The results of the paper yield insightful policy implications for Asian economies.

How do cross-border mergers and acquisitions affect firms’ management and stakeholders? Part 2

The effect of mergers and acquisitions (M&A) on different stakeholders is dependent on a number of factors. These factors can include but are not limited to: the type of M&A; each firm's reasons for the M&A; the offer amount; the product market of both the acquirer and target firms; the political environment; the economic environment; and the current situation of each firm. Employees play a significant role in businesses in which employee satisfaction affects the quality and quantity of business output. Firms interested in embarking on cross-border mergers have new employees to manage and must determine an appropriate wage to match the level of productivity of target employees. Wages may need to be altered as a result of employee relocation; employee compensation can be a complex matter, as the cost of living in each area varies greatly.

Cross-border insolvency law and multinational enterprise groups: judicial Innovation as an international solution

The Article argues that courts confronting the effects of multinational enterprise insolvency must undertake a pragmatic incursion into the separate entity doctrine. This argument is premised on gaps in the current Model Law which confers significant discretion on the courts. Our research shows that courts have fashioned innovative solutions to fill the gaps and thatgreater recognition of the legitimacy of these judicial incursions into the separate entity doctrine would facilitate the reduction of transaction costs in the case of multinational group insolvencies. We identify criteriawhereby a court would be able to determine that the inherentseparateness of the corporate structure should be disregarded andthe group regarded as one.

Competition and cooperation between international courts: a critical approach to the new paradigms of cross-border dispute resolution model

This article examines the arising cross-border dispute resolution models (Cooperation and Competition among national Courts) from a critical perspective. Although they have been conceived to surpass the ordinary solution of a Modern paradigm (exclusive jurisdiction, choice of court, lis pendens, forum non conveniens, among others), they are insufficient to deal with problems raised with present globalization, as they do not abandon aspects of that paradigm, namely, (i) statebased Law; and (ii) standardization of cultural issues.

Cross-border reverse takeover: o caso das multinacionais brasileiras

O Cross-border reverse takeover, conduzido pelas multinacionais brasileiras, gerou desempenho superior? Cross-border reverse takeover tem sido a expressão usada para designar a aquisição de empresas em países desenvolvidos por empresas de países em desenvolvimento. Essas aquisições, reversas porque invertem o fluxo tradicional dos investimentos internacionais, respondem atualmente por parcela significativa desses investimentos e colocam em cheque a forma tradicional de pensar os negócios internacionais. Meu argumento é que as empresas que fizeram aquisições em países desenvolvidos passam a ter acesso aos recursos não disponíveis no país de origem, tais como novas tecnologias, técnicas de gestão mais avançadas, mercado de capitais mais desenvolvidos, recursos financeiros de baixo custo, entre outros. Por outro lado, elas já desenvolveram competências para gerir esses recursos e passam a ter vantagem competitiva sobre os competidores locais, levando ao desempenho superior. No entanto, partindo dos dados da base de dados Thomson ONE, que registra todas as fusões e aquisições anunciadas, oncluídas ou não, e empregando as metodologias de estudos de evento e de regressões multivariadas, com base em dados contábeis sobre uma amostra de empresas brasileiras listadas em bolsa de valores, esta tese demonstra que estatisticamente não é possível afirmar que essas empresas obtiveram desempenho superior.

International commercial banks and their cross-border lending to governments of developing countries: a study of Peru, 1965-1976: preliminary version

Includes bibliography

The special rights other than shares in cross-border mergers of limited liability companies within the European Union. A perspective from the Spanish Law

The present research aims to study the special rights other than shares in Spanish Law and the protection of their holders in cross-border mergers of limited liability companies within the European Union frame. Special rights other than shares are recognised as an independent legal category within legal systems of some EU Member States, such as Germany or Spain, through the implementation of the Third Directive 78/855/CEE concerning mergers of public limited liability companies. The above-cited Directive contains a special regime of protection for the holders of securities, other than shares, to which special rights are attached, consisting of being given rights in the acquiring company, at least equivalent to those they possessed in the company being acquired. This safeguard is to highlight the intimate connection between this type of rights and the company whose extinction determines the existence of those. Pursuant to the Directive 2005/56/CE on cross-border mergers of limited liability companies, each company taking part in these operations shall comply with the safeguards of members and third parties provided in their respective national law to which is subject. In this regard, the protection for holders of special rights other than shares shall be ruled by the domestic M&A regime. As far as Spanish Law are concerned, holders of these special rights are recognized a right of merger information, in the same terms as shareholders, as well as equal rights in the company resulting from the cross-border merger. However, these measures are not enough guarantee for a suitable protection, thus considering those holders of special rights as special creditors, sometimes it will be necessary to go to the general protection regime for creditors. In Spanish Law, it would involve the recognition of right to the merger opposition, whose exercise would prevent the operation was completed until ensuring equal rights.

Cross-Border Banking

Der aktuelle Band der Reihe «Schweizerische Bankrechtstagung», befasst sich vertieft mit dem Thema des «Cross-Border Banking». Im Zentrum der Tagung vom Februar 2009 in Bern standen dabei weniger die Politik als vielmehr das Recht und praktische Fragen, die sich im Zusammenhang mit dem grenzüberschreitenden Bankverkehr stellen. Die Themen: Amtshilfe und Rechtshilfe – Neue Entwicklungen, Euro-Zahlungen gemäss den SEPA-Rulebooks (insbesondere die Haftung der Banken), Rechtliche Risiken im grenzüberschreitenden Verkehr, Aufsicht über international tätige Finanzgruppen – Konsequenzen für die Bank, Praktische Fragen der Vorort-Kontrolle, Die Standards zur Aufhebung des Bankgeheimnisses, Die Verletzung des Bankgeheimnisses – Individual- und Unternehmensstrafrecht.

Transnational Migration and Cross-border Mobility in the Serbian-Hungarian Border Region

The study is aiming to present migrant groups in the Serbian-Hungarian border region which are playing a role in forming transnational migration, ransnational networks and transnational spaces. Transnational migrants are using material, cultural, social and symbolical capital in various forms. The everyday activities of the people as well as their mobility, emotional attachments, and economic relationships have contributed to a transnational region the cross-border contacts in the last century were always present, even in spite of political and historical changes, only their intensity, political charge and tension has been changing. The asymmetries defining the border region has been reflected in different directions, places, time and in different volume. In this specially built and constantly reorganising scope, people who were living their everyday life have tried to use the differences for their benefit, and to improve their possibilities. With their transnational lifestyles and cross-border networks, they substantially contribute to the stability and prosperity of the cross-border region.