Posted: February 9th, 2015

Are French Targets of Foreign Acquirers different from French Targets of Domestic Acquirers?

Paper, Order, or Assignment Requirements

It’s possible though to analyze other aspects
Example. profitability and size

What is much more important is that you need to motivate the hypotheses
This is not through what other people have found
But using theoretical arguments (= grounded on some finance or economic theory)

Otherwise the hypotheses don’t make sense

A good example is the paper attached regarding Australian targets
Especially Table 3 for a simple comparison by origin of acquirers (Australian bidders vs Foreign
bidders)
You can see that there are some significant differences (as indicated by the Test of difference
in the last column)

These differences can be tested together using a so-called logit model
See Table 6
Focus on the last column (with All payment methods because it contains the full sample)

What you can do to start with is to
1. Ask whether there are differences between Foreign and domestic acquirers of French targets
2. Try to identify reasons why there might be some differences
(For that, refer to other papers. IF they are well written, they should explain this !!)

3. Then do the analysis
It’s possible in Excel ; but I would recommend a statistical software

4. Then discuss the results

Beside profitability and size (indicated above) there are other characteristics that you can look at
A. are the premiums offered higher or lower?
B. are foreign acquisitions paid more in cash or in stock?
C. Are foreign acquisitions more likely to succeed or not?
D. Are foreign bid more welcome or not (for that, look at hostile/friendly attitude)?
C. Are foreign acquirers more likely to be in the same industry as the target?

In addition, you can break down foreign acquirers by country (or by some other criteria)
For ex. European vs non-European acquirers
Perhaps, European bid are more welcome ???
Perhaps, US or UK bids are more likely to be rejected !!!

For ex. cultural attributes appear to affect the choice of payment
(see BMI paper, attached; Note that it takes the perspective of US acquirers)
You can integrate this aspect in your analysis
(Ex. Does cultural distance affect the likelihood of takeover success?)