International Mergers: Review Of Literature And Clinical Projects

This paper provides a review of the academic literature on cross-border mergers as a preamble to a project description of clinical studies of 18 major international mergers involving U.S. targets during 1988-2001. The clinical studies, all classroom tested, require students to assess merger motives of foreign acquiring and U.S. acquired firms, analyze the pre-merger Rnancial health of the U.S. firm, evaluate stock market reactions of the firms around announcement/consummation dates, review important public regulatory issues, discuss terms of the merger, and put all the specific merger information in context to general findings of the academic literature. Summaries of both short-term and long-horizon shareholder effects of cross-border mergers are provided from the extant academic literature. In addition, details of using Standard & Poor's Research Insight database are provided for the financial analysis. The project is designed for upper level undergraduate and MBA finance classes.