Wealth impact of cross-border US acquisitions of Chinese firms

Halil Kiymaz, Ilan Alon

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


Do US firms gain value by buying Chinese firms? This study investigates the wealth impact of mergers and acquisitions' announcements on US firms involved in cross-border acquisitions of 204 Chinese firms from 1999 to 2007. The empirical findings show that US firms experienced statistically significant wealth gains on the announcement day, though they are primarily concentrated in transactions involving divested targets. An analysis of wealth gains with respect to industry affiliation indicates that acquisitions in the Chinese manufacturing and services sectors experience the greatest wealth gains. In contrast, acquisitions in the financial sector result in a loss of wealth. Among the factors influencing wealth gains were the undervaluation of the yuan, favourable Chinese economic conditions, positive sales growth rates and financial slack of the acquiring firms.

Original languageEnglish
Pages (from-to)432-451
Number of pages20
JournalEuropean Journal of International Management
Issue number4
StatePublished - Jun 2011
Externally publishedYes


  • Acquirer's sales growth rate
  • Cross-border
  • Event study
  • Financial manufacturing and service sectors
  • International mergers and acquisitions
  • M&Amp;A
  • USA
  • Wealth creation


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