Mergers and acquisitions: What the US and Europe can learn from China
FEB researcher Killian McCarthy, together with Utz Weitzel (Radboud University Nijmegen) and Wilfred Dolfsma (Loughborough University London) compared 13.486 US, European and Asian mergers and acquisitions in the period 2003-2008. They found that Asia, and in particular China, had the best performing acquisitions. The US destroyed value, Europe neither created nor destroyed value, but Asia created value with their acquisitions - and the Chinese created the most.
The outcomes raise the question what the US and Europe can learn from China. What did the Chinese do differently? McCarthy: ‘First of all, the Chinese took their time making an acquisition. Western managers looked to complete their deals as soon as possible, and tended not to walk away from an announced deal, while the Chinese took their time, did their homework, and walked away when the risk was too high.’
Not so tight-fisted
McCarthy and his colleagues also found another significant difference. ‘Asian firms didn’t overpay. Western firms paid a ‘premium’ of up to 48%. In other words: they paid 148 for a company worth 100, while the Asians only pay 16%’, explains McCarthy. ‘This shows Dutch managers are not as tight-fisted as they might like to think that they are.’
More information
- Contact: Killian McCarthy
- The paper The first global merger wave and the enigma of Chinese performance is forthcoming in Management and Organisation Review.
Last modified: | 12 February 2024 11.35 a.m. |
More news
-
02 May 2024
Johan Remkes te gast in podcast Leiderschap in Onzekere Tijden Live
Oud-minister en oud-informateur Johan Remkes is op 15 mei te gast in de Podcast Leiderschap In Onzekere Tijden. In de liveopname van de podcastaflevering gaat hij met FEB-hoogleraren Janka Stoker en Harry Garretsen in gesprek over de huidige...
-
29 April 2024
The Maddison Project: New 2023 Update Illuminates Origins of Modern Economic Growth
In a new update of the renowned Maddison Project Database, economic historians shed new light on the genesis of modern economic growth.
-
29 April 2024
Guido Berends and Hylke Dijkstra win FEB Research Awards 2023
The awards for best PhD thesis and best graduate of the research master were presented at the annual PhD conference held on April 18. Guido Berends won the Best PhD Thesis Award 2023 and Hylke Dijkstra won the Research Master Graduate Award 2023.