SOAS Research Online

Abstract

In the context of M&A’s, this thesis investigates the role of industry relatedness between the acquiring and the target industry on explaining merger activity, as well as the probability of the occurrence of a merger wave. We provide evidence from both the U.S. and the UK market to allow for comparison. While we find no significant evidence of the relevance of industry networks in explaining U.S. merger activity, our results support a positive and significant relationship between UK merger activity and the level of industry relatedness between the acquirer and the target. Furthermore, we examine cross-border M&A’s within three distinctive regions: North America, Europe, and Asia. Similar to domestic M&A’s, we find that cross-border M&A’s occur in a wave-like pattern. We further analyse post-M&A performance using data of cross-border deals from 1996-2017. In particular, we explore the post-merger performance of cross-border mergers occurring inside vs. outside wave periods. We find that cross-border merger deals occurring within a wave period result in value creation if the acquirer company has a high degree of internationalisation. This relationship is primarily significant for acquirers from the North American region.