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Measuring financial synergies in cross-border M&A transactions using diffusion processes

Brailsford, Timothy John; Liao, Szu-Lang; Penm, Jack HW

Description

In a cross-border M&A framework, the question and measurement of financial synergy can be important in the analysis of the transaction and consideration needs to be given to whether the specific cross-border financial risks outweigh operational synergies. This paper develops a diffusion model to explore a set of optimal capital structures of the acquiring firm, target firm and merged firm. Differential taxes, bankruptcy costs, interest rate risk and foreign exchange risk are considerations of...[Show more]

CollectionsANU Research Publications
Date published: 2007
Type: Journal article
URI: http://hdl.handle.net/1885/25986
Source: International Journal of Services Technology and Management
DOI: 10.1504/IJSTM.2007.013920

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