Abnormal returns earned by target firms at the time of initial acquisition announcements are related to form of payment, degree of resistance, and type of offer. Results indicate that interdependence among these characteristics is important. Previous research suggests that tender offer targets earn higher abnormal returns than merger targets. After controlling for payment method and degree of resistance, however, the difference in abnormal returns between tender offers and mergers is insignificant. Resisted offers are associated with insignificantly higher returns than unresisted offers. Abnormal returns associated with cash offers are significantly higher than those associated with stock offers.

The results presented in this paper strongly support the integrative theory of mergers and acquisitions (Finkelstein and Larsson (1999), which suggests that the organizational integration is one of the most important determinants of M&A success. Overall, the EF is negatively correlated with CARs when the entire data set is analyzed. The results suggest that integration processes become more complicated because the employees from the target firm are more resistant to the new culture due to a low level of cultural domination of the acquiring firm. In addition, the results demonstrate that this effect is strongest in 1) within-industry mergers, 2) cross-region mergers, and 3) mergers involving employees with high-valued skill sets. I find significant effects for the EF only in some specific industry groups that require employees with high skill levels and expertise. Additionally, the findings also show that a group of M&A transactions in which target firms' average deal value per acquired employee is high, indicating that the employees have high skill sets and expertise, experiences a particularly strong effect from the EF.

In the context of interconnected businesses and financial markets, we examine the competitive dynamics and the stock price discovery process of international acquisitions, and we measure its effects on the US market. To achieve this, we analyze a sample of large international and US acquisitions, and we compare its effects on the stock price abnormal returns of US-based rivals. This aims to improve our understanding of the information content of international mergers announcement. We observe that international and US target acquisitions generate positive abnormal returns to the US-based rivals, but the effect is statistically significant only for US target acquisitions. We also observe that international deals are related to lower abnormal returns to the US rivals during the run-up period. The abnormal returns to the rivals during the run-up period are positively related to the abnormal returns to the targets. Also, we observe that smaller deal values are associated with higher abnormal returns to the rivals during the run-up period. We do not identify statistical differences to the rival's stock price abnormal returns when targets are publicly listed vs unlisted. We highlight several deal-specific and firm-specific characteristics that are statistically significant to explain the abnormal return to the targets, but that are not significant to explain the abnormal returns to the rivals. These include: the acquirer public status, the proportion of cash in the transaction, the premium paid, the horizontal nature of the deal and the identification of the target as Initial Industry Target. The abnormal returns to the targets are consistent with previous studies. Targets of US and international acquisitions earn significant positive abnormal returns. US targets earn on average significant higher abnormal returns than international targets. Also, we observe that horizontal mergers are associated with higher abnormal returns to the targets than nonhorizontal mergers. Targets identified as Initial Industry Target realize significant lower abnormal returns. Finally, other deal-specific characteristics appear related to the abnormal returns to the targets, including the deal value, the acquirer public status, the proportion of cash in the transaction and the premium paid.