Abstract
This study investigates the impact of mergers and acquisitions on US bidders and targets involved in cross-border mergers of financial institutions. The findings indicate that while US targets experience positive significant wealth gains, US bidders encounter insignificant wealth gains during the merger announcements. There are also differences in wealth gains with respect to industry classification and to the regional location of foreign targets and bidders. The macroeconomic variables, including foreign and US economic conditions, level of economic development of target country, exchange rate volatility along with the effectiveness of foreign government, relative size of participants, and control of target largely explain the wealth gains to bidders and targets.
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