The impact of participation in the European monetary union of the abnormal returns to U.S. target companies acquaired by European firms


This study examines international acquisition transactions involving European acquiring firms and U.S. target firms over the period 1988-1999. The objective of the study is to identify the impact of EMU participation on the abnormal returns (ARs) realized by U.S. targets. Several important findings emerge from the analysis. First, consistent with the findings of previous studies, U.S. targets experience significant positive cumulative abnormal returns (CARs) around the time of acquisition announcement. Second, U.S. targets realize greater gains when acquired by a company originating from a current member of the EMU than when acquired by a company originating from a current non-EMU member country. Third, when evaluating transactions that involve EMU member countries, the CARs accruing to U.S. targets are greater for acquisitions occurring prior to the country's membership in the EMU. Analysis and comparison of the groups of transactions involving France and Germany suggests that the level of CAR.s generated to the U.S. targets may be inversely related to the economic and currency stability of the country from which the acquirer originates. However, the impact of participation in the EMU as well as the difference in returns generated by an EMU member before and after its participation the EMU. is not statistically significant. Regression analysis reveals a significant inverse relationship between the size of the target firm and ARs. In addition, test results show a significant positive relationship between the premium paid by the acquirer and the ARs experienced by U.S. targets.


This item is only available in print in the UCF Libraries. If this is your thesis or dissertation, you can help us make it available online for use by researchers around the world by downloading and filling out the Internet Distribution Consent Agreement. You may also contact the project coordinator Kerri Bottorff for more information.

Thesis Completion





Whyte, Ann Marie


Bachelor of Science (B.S.)


College of Business Administration

Degree Program



Business Administration -- Dissertations, Academic;Dissertations, Academic -- Business Administration;European Economic Community -- United States;United States -- Foreign economic relations -- European Union countries







Access Status

Open Access

Length of Campus-only Access


Document Type

Honors in the Major Thesis

This document is currently not available here.