Mergers and Acquisitions in Europe

Despite the growing importance of Europe in the worldwide M&A market, empirical research on the value effects of European acquisitions remains limited to date. The bulk of previous research on M&A activity is confined to the US and UK markets. The pattern of M&A activity in Continental Europe is much less explored in the empirical literature. In comparison to the US and UK, Continental European companies are characterized by weaker investor protection and less developed capital markets (LaPorta et al., 1998), and by a more concentrated ownership structure (Faccio and Lang, 2002). The analysis in this book addresses the potential differences in Anglo-American market for corporate control and Continental European one. We investigate the differences in wealth effects between Continental Europe and the UK using a large sample of 2,823 European takeover deals announced between 2002 and 2010. We address the question of whether European mergers and acquisitions (M&As) create more value to target than bidding firm shareholders, and why bidders pay larger premiums in cross-border than in domestic acquisitions.