Motives to Restructure Industries – Finnish Evidence of Cross-Border and Domestic Mergers and Acquisitions

Working Papers 195 Eero Lehto

Abstract

We have estimated a multilogit model for the probabilities that a firm will acquire or become a target in different M&A categories, which are defined according to the location of an acquiring firm with respect to a target. We discovered that such firm characteristics of an acquiring firm that can be regarded as an indication of a good capacity to monitor a target or to internalise the potential synergies of M&A increase the probability of distant M&As at the expense of close M&As. Respectively, such factors that ease the monitoring of the target firm’s value increase the probability that such a firm becomes a target which is located far from an acquiring firm.