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Deal structure decision in the global market for divested assets

journal contribution
posted on 2023-06-08, 13:46 authored by Surendranath R Jory, Jeff Madura, Thanh N Ngo
We find that the deal structure decision to engage in a foreign asset purchase instead of acquiring a foreign target's equity is more likely when bidders are smaller, the bidder's proportion of foreign sales-to-total sales is higher and the target is in an unrelated industry. In addition, bidders tend to execute asset purchase transactions rather than acquiring a foreign target's equity when the target's corresponding country has a relatively favorable rating for rule of law, control of corruption, political stability and absence of violence, regulatory quality and economic freedom. We also find that bidders engaging in asset purchase transactions experience significantly more favorable valuation effects than those that acquire the equity of target firms.

History

Publication status

  • Published

Journal

International Review of Financial Analysis

ISSN

1057-5219

Publisher

Elsevier

Volume

24

Page range

104-116

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-11-20

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