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DOI: 10.15240/ ul/001/2018-4-014
In oduc ion
C oss-bo de me ge s and acquisi ions (M&As)
ha e gained popula i y o e he las wo
decades (E el, Liao, & Weisbach, 2012). They
ha e become a dominan o m o o eign di ec
in es men in wo ld economy (Zhu, 2011).
Resea ch on his ype o expansion s a egy,
howe e , has no kep pace wi h his end and
i is highly agmen ed, lea ing gaps ha need
o be add essed (Collins e al., 2009). The a ea
o c oss-bo de acquisi ions in Cen al and
Eas e n Eu ope, which is also o in e es in his
pape , ep esen s such a gap.
The p og ess o globaliza ion posi i ely
in l uenced he wo ldwide acquisi ion and
me ging ac i i ies o companies. Howe e , he e
a e some ac s and ends in he wo ld economy
ha highligh he impo ance and speci i ci y o
M&As in Cen al and Eas e n Eu ope. These
ac s and ends hang especially wi h he
de elopmen a e 1993, when a as numbe
o me ge s we e ollowed by an unp eceden ed
inc ease o wo ldwide ansac ions. To some
ex en , his de elopmen was caused by
changes o he poli ical landscape in Eu ope
and he ela ionships among Eu opean
coun ies. Because o all o he “i on cu ain”,
he p oceeds o Eu opean in eg a ion, mainly
he Eu opean single ma ke , ha e c ea ed
new possibili ies. As a esul , companies ha e
been o ced o de elop and implemen new
expansion s a egies. Mo i a ed by he p omise
o alue c ea ion o hei sha eholde s,
mul ina ional co po a ions ha e begun o use
c oss-bo de M&As as an impo an ool o
acqui e key esou ces and gain ma ke en y o
Cen al and Eas e n Eu opean ma ke s (Zhu,
2011; Ga u o á, Vagašo á, & Ko áč, 2016).
As unde s anding he p oblem and
oppo uni ies o c oss-bo de acquisi ions in
Cen al and Eas e n Eu ope is he essen ial
elemen in unde s anding he na u e o he up-
o-da e global expansion s a egy o a company
om an eme ging ma ke connec ed o he
EU, he main aim o his pape is o analyze
announced and comple ed c oss-bo de
acquisi ions be ween a public lis ed acqui e
and a ge companies om Cen al and Eas e n
Eu ope concen a ing on he associa ed
eac ions o he capi al ma ke s. The empi ical
analysis ocuses on companies om Russia
and Ge many as dominan acqui e s in his
con ex (S a is a, 2018).
Taking in o accoun he abo e, ollowing
hypo heses a e es ed in his pape :
Hypo hesis 1: Capi al ma ke belie es ha
he e ec s o he in es men s ealized in he
o m o c oss-bo de acquisi ions in Cen al and
Eas e n Eu opean ma ke s a e posi i e.
Hypo hesis 2: Russian ma ke is be e
in he a ea o c oss-bo de acquisi ions han
emaining Cen al and Eas e n Eu opean
ma ke s.
Analysis esul s indica e ha Cen al and
Eas e n Eu ope a e e y a ac i e om ma ke ’s
pe spec i e due o he expec ed g ow h a es
and he amewo k condi ions as well as om he
pe spec i e o Wes e n Eu opean in es o s, and
ha he Russian ma ke is be e in he a ea o
c oss-bo de acquisi ions han emaining Cen al
and Eas e n Eu opean ma ke s. Analysis esul s
also show ha e ec s o in es men s ealized
in o m o c oss-bo de acquisi ions in Cen al
and Eas e n Eu ope a e posi i e, and changes
in s ock p ices a e s a is ically signi i can . These
i ndings p o ide some suppo o he syne gis ic
and in es men oppo uni y a gumen s o M&As
in eme ging ma ke s asse ed by Cha i, Ouime ,
and Tesa (2004).
CROSS-BORDER ACQUISITIONS
IN CENTRAL AND EASTERN EUROPE
WITH FOCUS ON RUSSIA VERSUS
GERMANY DEALS: AN EMPIRICAL ANALYSIS
Tim Langens ein, Anna Voj ko á, Ma in Užík, And eas Ruepp
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The emainde o his pape p oceeds as
ollows. Sec ion 1 p o ides he e iew o ele an
li e a u e. Sec ion 2 explains he main mo i es
o c oss-bo de M&As in Cen al and Eas e n
Eu ope. Sec ion 3 desc ibes he sample and
he esea ch me hodology. Sec ion 4 p esen s
he esul s, and Sec ion 5 summa izes and
concludes i all.
1. Li e a u e Re iew
The p og ess o globaliza ion (Hi e al.,
1998; Hi , Kea s, & DeMa ie, 1998), ela ed
inc eased economic in eg a ion (Bjo a n,
2004) and libe aliza ion o in e na ional ade
(Hijzen, Gö o, & Manchin, 2008), oge he
wi h accele a ed de elopmen o echnology
(Conklin, 2005) posi i ely in l uenced he
wo ldwide acquisi ion and me ging ac i i ies
o companies. As a consequence o business
en i onmen ans o ma ion, i ms equi ed
new esou ces and al e na i es o s a egic
expansion and s eng hening hei own
compe i i eness, and M&As seemed o be
a ela i ely l exible (Rani, Yaday, & Jain, 2016),
as (Vasconcellos & Kish, 1998) and i nancially
a ac i e (Conklin, 2005) esponse o his need
(see also Moelle , Schlingemann, & S ulz,
2004; Nadolska & Ba kema, 2007). No he ac
ha M&As a e one o he la ges and iskies
capi al budge ing p ojec s ha companies
unde ake has impeded he global g ow h o
in e es in M&As. The p oo o his is he ise
in o al ansac ion alue in M&As om abou
$151 billion in 1990 o mo e han $721 billion in
2016 (UNCTAD, 2000; 2016), and he a ionale
o his may be a ibu ed in pa o a di e ence
in companies’ mo i es o ealizing such a deal
(Boubak i, Chan, & Kooli, 2012).
Deals belonging o M&As began o appea
mo e p onounced as a back as in he ea ly 20 h
cen u y in he U.S., whe e a la ge numbe o
smalle companies began o join he so-called
us s in o de o gain a compe i i e ad an age in
a apidly consolida ing global ma ke (Spodniak
& Cesnak, 2010). Subsequen ly, since 1993
(Shimizu e al., 2004), a as numbe o M&As
was ollowed by an unp eceden ed inc ease o
wo ldwide ansac ions (Moschie i & Campa,
2014). As a esul , M&As oday a e no longe
he domain o jus U.S. companies (No bu n &
Schoenebe g, 1994).
To some ex en , he g ow h o popula i y o
M&As ou side he U.S. ma ke was caused by
changes o poli ical landscape in Eu ope and
he ela ionships be ween Eu opean coun ies
(Calo i & Luba kin, 1995). Because o he all
o he “i on cu ain”, he p oceeds o Eu opean
in eg a ion, mainly he Eu opean single ma ke ,
ha e c ea ed new possibili ies (Bjo a n, 2004).
Thus, in he 1980s, c oss-bo de M&As seemed
pa icula ly a ac i e o companies wan ing
o become a pa o single Eu opean ma ke .
While, howe e , be o e emaining na ional
ba ie s came down, he main mo i e o hese
deals was a g owing conce n ha uni i ed
Eu ope could ans o m in o a p o ec ionis
Fo ess Eu ope, la e he e we e wo pa icula
easons o M&As o EU i ms. Fi s ly, he e
was a need o comple e he es uc u ing
ha had begun in he 1980s which could no
be done by companies om he EU membe
coun ies alone, and, secondly, he e we e
some egula o y changes ha enabled hos ile
akeo e s o occu mo e easily (Angwin & Sa ill,
1997; Vasconcellos & Kish, 1998). Acquisi ion
and me ging ac i i ies in he EU subsided jus
in he la e 1980s, when, as s a ed by Rugman
and Ve beke (1991), he s eps ha we e being
aken o b ing Eu ope oge he eally c ea ed
a na u al ba ie o en y o ou side s.
Bjo a n (2004) and Moschie i, Ragozzino,
and Campa (2014) also conside he p ocess
o egional in eg a ion expe ienced by he EU
as a signi i can ac o a ec ing he g ow h
s a egies o companies wo ldwide. They a gue
ha de elopmen o he EU has c ea ed a mo e
l uid en i onmen o i ms seeking in e na ional
g ow h ia M&As, despi e he di e ences ha
con inue o exis ac oss he EU membe s.
Ongoing business en i onmen ans o ma ion
in he EU, namely pu s p essu e on i ms
o es uc u e bo h in e nally and ex e nally,
and accompanied de egula ion aises many
incen i es o unde ake c oss-bo de M&As in
his egion o Eu ope (see also Wes on, Chung,
& Hoang, 1998; Rossi & Volpin, 2004; Rao &
Reddy, 2015).
Thus, in he cou se o ime, mo i a ed by he
p omise o alue c ea ion o hei sha eholde s,
mul ina ional co po a ions ha e begun o use
c oss-bo de M&As as an impo an ool o
acqui e key esou ces and gain ma ke en y o
Cen al and Eas e n Eu opean ma ke s (Zhu,
2011). The si ua ion has mainly a isen as he
coun ies o Cen al and Eas e n Eu ope began
o loosen high ba ie s and es ic ions on
o eign pa icipa ion in he ea ly 1990s (Conklin,
2005). The indus ial de elopmen o many
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Cen al and Eas e n Eu opean economies, hei
apid economic g ow h (DePamphilis, 2015;
Ga u o á, Vagašo á, & Ko áč, 2016), and hei
deepening connec ion o he EU (G igo ie a &
Pe unina, 2015) ha e also been a powe ul
d i e o his de elopmen .
The need o ocus on M&As in Cen al and
Eas e n Eu ope is suppo ed also due he ac
ha one o he main esul s o globaliza ion is
a g ea e ole o eme ging ma ke s in he wo ld
economy (see also Boubak i, Chan, & Kooli,
2012; Ma ko ić, Raki a, & Filipo ić, 2016).
Cha i, Chen, & Dominquez (2012) also s a e
ha while o eign in es men has adi ionally
l owed om de eloped o de eloping coun ies,
in ecen yea s he e has been an in e se end.
One o he sho comings o he ex an M&A
li e a u e is jus he ela i e ina en ion o c oss-
bo de M&As in and ou o eme ging economies,
esp. in and ou o Cen al and Eas e n
Eu opean ma ke s. In con as o me ge s and
acquisi ions in de eloped coun ies, which ha e
been analyzed by a la ge numbe o s udies (e.g.
Conn & Connell, 1990; Chen & Su, 1997; Hi e
al., 1998; And ade, Mi chell, & S a o d, 2001;
Se h, Song, & Pe i , 2002; Aw & Cha e jee,
2004; Campa & He nando, 2004; Goe gen
& Renneboog, 2004; Cha i, Quime , & Tesa ,
2004a,b; Kiymaz, 2004; Lowinski, Schie eck, &
Thomas, 2004; Shimizu e al., 2004; O che e
& Ip, 2006; Benou, Gleason, & Madu a, 2007;
Collins e al., 2009; Rabbiosi, Elia, & Be oni,
2012), only a ew s udies ocus on M&As in and
ou o eme ging ma ke s (e.g. Cha i, Ouime , &
Tesa , 2004; Pop, 2006; Aulakh, 2007; Nagano
& Yuan, 2007; B is & Cabolis, 2008; G aham,
Ma ey, & Yawson, 2008; T ojanowski, 2008;
Pablo, 2009; G ego ic & Vesp o, 2009; Gubbi
e al., 2010; Bhaga , Malho a, & Zhu, 2011;
Peng, 2012, Young e al., 2014; Lebede e
al., 2015; Ma ko ić, Raki a, & Filipo ić, 2016).
Cen al and Eas e n Eu ope a e analyzed e.g.
by Uhlenb uck and De Cas o (2000), Meye
(2003), Lanine and Vande Venne (2007),
Bedna czyk e al. (2010), B ou he s and Diko a
(2010) and Poghosyan and de Haan (2010),
and he Russian acquisi ion and me ging
ac i i ies a e he main objec o in e es e.g. by
Robe s, Thompson, and Mikolajczyk (2008),
Bhaga , Malho a, and Zhu (2011), Be and
and Be schinge (2012) and Rabbiosi, Elia, and
Be oni (2012).
This pape is closely ela ed o Sha ma
and Raa (2016) who ocus on he s ock
ma ke eac ion o c oss-bo de acquisi ion
announcemen s ha in ol e Eas e n Eu opean
eme ging-ma ke a ge s. Using a da ase
consis ing o 125 deals in which i ms om
Ge many, F ance, Ne he lands, and he Uni ed
Kingdom acqui e owne ship s akes in eme ging
as well as de eloped-ma ke s in Eu ope du ing
he pe iod 1 Janua y 2000 h ough 31 Decembe
2011, he au ho s s a e ha when he a ge i m
is loca ed in ei he he Czech Republic, Poland,
Hunga y, o Russia, cumula i e abno mal e u n
o he acqui ing de eloped-ma ke company
shows s a is ically signi i can inc ease o 1.26%
o e a h ee day e en window, ollowing he
announcemen .
2. Mo i es o C oss-Bo de
Acquisi ions in Cen al
and Eas e n Eu ope
The acquisi ion p ocess is a dynamic one
(Geo gopoulos, A gy os, & Bou a, 2008). I
ep esen s one o he la ges and iskies capi al
budge ing p ojec s ha en e p ises unde ake
(Boubak i, Chan, & Kooli, 2012; Alexand ou,
Gounopoulos, & Thomas, 2014). Nume ous
au ho s he e o e examine he incen i es o
companies o M&As (e.g. Meye , 2011).
Acco ding o Sha ma and Raa (2016), he
mo i a ions behind c oss-bo de M&As appea
o a y widely, depending on he indi idual
company, he espec i e indus y, he cu en
economic en i onmen , and on o he a ious
in l uencing ac o s. DePamphilis (2015) s a e
ha he d i e s o c oss-bo de M&As a e
la gely simila o hose o domes ic M&As, and
Ho n and Pe sson (2001), gi e a ac as he
main ad an age o a c oss-bo de acquisi ion
ha i p o ides access o o eign ma ke , while
a domes ic acquisi ion educes he compe i i e
p essu e in he domes ic ma ke (see also
Bjo a n, 2004). Due o hei in e na ional
na u e, howe e , he e a e some speci i c
ac o s which d i e his c oss-bo de deals,
such as a ou able egula o y en i onmen and
mo e s able poli ical backg ound in he hos
coun y, exchange a es, low o eign ax a es
and be e clien base in he o eign economy
(see Fig. 1). Cul u al, geog aphic, and coun y-
le el go e nance di e ences a e also impo an
mo i es o a c oss-bo de ansac ion (Sol es &
Ga u o a, 2014). The same goes o di e ences
in esou ces and echnologies a ailable in he
hos coun y. Moelle , Schlingemann, and S ulz
(2004) and Boubak i, Chan, and Kooli (2012)
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210 2018, XXI, 4
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conside ha he main mo i e o a c oss-
bo de acquisi ion is he alue c ea ion o
companies’ sha eholde s ha usually comes in
he o m o isk educ ion, syne gy e ec s and
he acquisi ion o unde alued asse s.
In o he wo ds, M&As p o ide unique
oppo uni ies o he acqui e o gain new
capabili ies which an en e p ise migh
o he wise i nd di i cul o de elop on i s own,
o g ow apidly, and o gain access o new
ma ke s (Degbey & Hasse , 2016). Zhu, Jog,
and O che e (2014) also gi e s a egic ma ke
en y hypo hesis as he majo mo i a ion o
c oss bo de M&As. They unde s and M&As as
a apid way o en e ing a new ma ke in a new
coun y, and hey no e ha acqui e en e s he
ma ke c oss bo de by acqui ing an al eady
es ablished i m. In his way, he acqui e can
ake ad an age o dis ibu ion channels, an
es ablished b and name, a quali i ed labou
o ce, managemen expe ience and local
knowledge. C oss-bo de acquisi ions gi e
acqui ing i ms access o esou ces ha may
no be a ailable in hei home economy, and
he eby, hey enhance hei capabili ies o be
compe i i e (Rani, Yaday, & Jain, 2016).
Nea y (2007) iews c oss-bo de
M&As as being mo i a ed by ma ke powe
conside a ions, and Guadalupe, Kuzmina, and
Thomas (2012) s a e ha he c oss-bo de
M&As a e ini ia ed in pa icula by he ma ching
o complemen a y asse s be ween domes ic
and mul ina ional companies. Las bu no leas ,
some esea che s no e ha M&As may educe
ope a ing cos s and ansac ion cos s, imp o e
e i ciency, and enhance he managemen o
esou ce dependency. O he s a gue ha M&As
a e d i en p ima ily by managemen sel -
in e es (Sande s, 2001).
Cen al and Eas e n Eu opean ma ke s a e
p ima ily in e es ing as hey o e high p o i
ma gins due o – in e alia – low wage le els
and inexpensi e p oduc ion cos (see Eu os a ,
2016). Fu he mo e, he e a e pa ly e y good
condi ions o in es men o be ound especially
in new EU-coun ies. Eu opean enla gemen
and in eg a ion has sp ead he ule o law and
cons i u ional democ acy in his egion. This
se up has led o poli ical s abili y and b ough
economic success. F om 2005 o 2014 he
g oss domes ic p oduc a ma ke p ices in
Cen al and Eas e n Eu ope g ew om 6,910
EUR o 11,909 EUR (Eu os a , 2016).
Fig. 1: Mo i es o c oss-bo de me ge s and acquisi ions
Sou ce: own acco ding o Lebede e al. (2015), Rani, Yaday, & Jain (2016) and Sha ma & Raa (2016)
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In pa icula , wo mo i es a e o g ea
impo ance in he con ex o c oss-bo de
acquisi ions be ween Cen al and Eas e n
Eu opean and Russian, esp. Ge man
companies. One o cou se a e syne gy e ec s,
o ins ance in he o m o po en ial cos sa ing,
pu chase o expe ise and ex ensions in he
alue chain. The o he main mo i e is ma ke
d i en: gaining ma ke sha es and acqui ing
new p oduc s as well as o e coming o ma ke
en y ba ie s. I is all abou e aining o winning
a compe i i e ad an age.
The deepening o Eu opean single ma ke
and Eu opean Union’s enla gemen owa ds
Cen al and Eas e n Eu ope imp o ed he
acquisi ion condi ions o companies in ha
pa o Eu ope. Cen al and Eas e n Eu opean
ma ke s a e p ima ily in e es ing as hey o e
high p o i ma gins due o – in e alia – low
wage le els and inexpensi e p oduc ion
cos (see Eu os a , 2016). I is no su p ise
ha bo h s a egic and ins i u ional in es o s
i nd such ci cums ances wo h conside ing.
Fu he mo e, he e a e pa ly e y good
condi ions o in es men o be ound especially
in new EU-coun ies. Eu opean enla gemen
and in eg a ion has sp ead he ule o law and
cons i u ional democ acy in his egion. This
se up has led o poli ical s abili y and b ough
economic success. F om 2005 o 2014 he
g oss domes ic p oduc a ma ke p ices in
Cen al and Eas e n Eu ope g ew om 6,910
EUR o 11,909 EUR (Eu os a , 2016).
3. Da a and Me hodology
3.1 Da a
In p esen empi ical analysis, all announced
akeo e s by a Cen al o Eas e n Eu opean
company in he pe iod om 1 Janua y 1990 o
30 June 2014 a e examined. The ime ame
e l ec s undamen al changes in he o e all
en i onmen as men ioned ea lie , and co e s
ecen global i nancial and economic c isis and
Eu opean so e eign deb c isis, i.e. he ime
ame ha ew ha e s udied. Due o he limi ed
scope o his pape , howe e , he mo e de ailed
analysis o he sample and e ec s associa ed
wi h he c isis is no pa o he p esen ed
empi ical analysis.
The ini ial sample in ol es 11,085 deals.
The i nal sample ela es only o ansac ions
wi h Russian and Ge man companies. The
sample consis s o 150 ansac ions. The da a
o igina e om bo h he me ge s and acquisi ions
da abase by Bloombe g (Da a om 15 Ma ch
2005 o 30 June 2014) and he me ge s and
acquisi ions da abase by Thomson Financials
(Da a om 1 Janua y 1990 o 15 Ma ch
2005). The limi a ions o he analysis esul ing
om a s uc u al b eak in he da a a e aken
in o accoun when in e p e ing esul s. The
s a is ical analysis was ca ied ou using he
so wa e SPSS.
The ou comes o p ima y analysis o he
c oss-bo de akeo e s in Cen al and Eas e n
Eu ope in sec ion 4.1 a e ollowed by he s a is ical
analysis o capi al ma ke ’s eac ions in he
a e ma h o an announced c oss-bo de akeo e
o a Russian company by a Ge man company and
ice e sa in sec ion 4.2. The pape ocuses on
22 Cen al and Eas e n Eu opean a ge coun ies
(Albania, Bosnia and He zego ina, Bula ia,
Ge man Democ a ic Republic – un il 1990,
Es onia, Yugosla ia, C oa ia, La ia, Li huania,
Macedonia, Poland, Romania, Russia, Se bia,
Slo ak Republic, Slo enia, Czech Republic,
Czechoslo akia – un il 1993, Hunga y, Uk aine,
Bela us) a ec ed by c oss-bo de acquisi ions by
ei he Russian o Ge man companies.
3.2 Me hodology
The esea ch me hodology is based on
de e mina ion o he expec ed e e ence a e o
e u n and on calcula ion o he excess e u ns
which we e made in he ollowing way.
1) De e mina ion o expec ed e e ence
a e o e u n
In o de o de e mine abno mal excess e u ns,
he e e ence a e o e u n is calcula ed
acco ding o a ma ke model. The ma ke model
is based on Ma kowi z (1959) and assumes
a linea cohe ence be ween he e u n om
comme cial pape s and ma ke po olio.
i mii i RR ,,,

 (1)
whe e Ri, is he e u n on secu i y i a day
; αi, βi a e pa ame e s; εi, is noise; and Rm, is
he e u n on he ma ke a day .
Alpha and be a pa ame e s a e de e mined
wi h he OLS me hod in he con ex o his s udy.
The es ima ion pe iod ends one day p io o
beginning o he e en pe iod in o de o a oid
any o e lapping. Cen al wi hin he obse a ion
is he day o he announcemen . The e en
pe iod comp ises 20 days a ound he day o
he announcemen . As he es ima ion pe iod
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o he de e mina ion o he ma ke model’s
pa ame e s, a pe iod o 748 o 20 days p io o
he e en pe iod is used ( o gene al ema ks
on he ma ke model and he de e mina ion
o he leng h o es ima ion pe iod see Wul
(2001, p. 116). This pe iod co e s 728 ading
days. The S oxx-EURO 600 Index is used o
de e mine he e u n o he ma ke po olio.
2) Calcula ion o he excess e u ns
The di e ence be ween e ec i ely ealized
and heo e ically an icipa ed e u n o a sha e
exp esses he excess e u n. In he in o ma ion-
e i cien ma ke and unde he condi ion o he
concu en alidi y o he model consul ed in
o de o de e mine he expec ed e u n, he e
do no exis sys ema ic de ia ions o he wo
e u n i gu es.
E(ARi, ) = 0 (2)
whe eby he excess e u n is calcula ed as
ollows:
ARi, = Ri, – E(Ri, ) (3)
whe e ARi, is he abno mal e u n o he sha e
i a day , Ri, is obse ed e u n o he sha e
i a he s ock exchange a day , and E(Ri, ) is
expec ed e u n o he sha e i a day .
In li e a u e, he addi i e as well as he
mul iplica i e conjunc ion o he excess e u ns
and he de e mina ion o buy-and-hold excess
e u ns a e used o de e mine cumula ed
excess e u ns. Empi ical s udies mainly use
he addi i e de e mina ion p ocedu e ( o he
calcula ion o cumula i e excess e u ns see
Mi chell and S a o d (2000)).
The addi i e app oach o de e mina ion o
cumula ed excess e u ns aces back o he
wo k o Fama e al. (1969) and is de e mined
as ollows:
ARi,



L
Li
AR
CAR



,, (4)
The mul iplica i e conjunc ion o he excess
e u ns was p oduced by Ball and B own
(1968). The esul o a cumula ed mul iplica i e
comp ession o excess e u ns is cap u ed
in an abno mal-pe o mance-index (API). In
he p esen s udy i is eso ed o he addi i e
cap u e o he cumula ed excess a es (see
Wul (2001, p. 134)).
4. Resul s and Discussion
o Findings
4.1 C oss-Bo de Acquisi ions
in Cen al and Eas e n Eu ope
The con empla ion o he pa icula ans e ees
by hei company’s domicile shows ha mos o
he announcemen s o an Cen al o Eas e n
Eu opean c oss-bo de ansac ion we e s a ed
by a company ha has i s egis e ed o i ce in
Cen al o Eas e n Eu ope ( hese en e p ises
a e summa ized in “Cen al and Eas e n
Eu ope“ ca ego y). Howe e , his su p ising ac
can be explained by he de i ni ional dis inc ion
o a c oss-bo de acquisi ion by Thomson
Financial. Acco ding o Thomson Financial,
a M&A ansac ion by a ans e ee ha has
i s egis e ed o i ce in he Cen al o Eas e n
Eu opean ma ke , he acquisi ion a ge , is
de i ned as a c oss-bo de ansac ion in case
he ans e ee’s pa en company has i s head
o i ce ou side o ha ma ke .
Tab. 1 shows M&A dis ibu ion acco ding
o geog aphical a ea o bo h he acqui ing and
he a ge i m. 44.5% o all ope a ions we e
announced by i ms om he Uni ed Kingdom.
I we lea e Cen al and Eas e n Eu ope
c oss-bo de acquisi ions ou o conside a ion
hen US companies a e he mos common
ans e ees wi h 1,208 announced c oss-bo de
acquisi ions, ollowed by Ge man companies
wi h 998 announcemen s in Cen al and
Eas e n Eu ope.
Economic de elopmen o he espec i e
Cen al and Eas e n Eu opean coun ies, as
well as he geog aphical p oximi y o Wes e n
Eu opean coun ies seem like he essen ial
c i e ia in he decision making p ocess.
Companies om Poland, Czech Republic,
Slo akia, Hunga y and Russia a e included in
almos 63% o he announcemen s, which a e
all – excep Russia – close o Wes e n Eu ope.
Fu he mo e, Ge man ans e ees p e e an
acquisi ion a ge om one o hese coun ies in
76% o all cases. Mo eo e , as can be seen om
he i gu e, mos o he announced ansac ions
wi h 2,289 acquisi ion a ge s came om Russia,
ollowed by Poland wi h 1,881 and Czech
Republic wi h 1,374 acquisi ion in en ions.
Rega ding he companies ha a e
summa ized in he o e all ca ego y „Cen al
and Eas e n Eu ope“, i becomes appa en
ha mos o he announcemen s we e made
be ween companies in he same egion.
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4, XXI, 2018
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Acqui e
Na ion
Ta ge Na ion
Sum
Albania
Bosnia and
He zego ina
Bulga ia
GDR (un il 1990)
Es onia
Geo gia
Yugosla ia
C oa ia
La ia
Li huania
Macedonia
Molda ia
Poland
Romania
Russia
Se bia
Slo ak Republic
Slo enia
Czech Republic
Czechoslo akia
(un il 1993)
Hunga y
Uk aine
Bela us
A gen ina 11 2
Bahamas 11 11 1 14
Belgium 2 15 1 2 4 2 40 9 15 4 9 6 39 16 20 3 1 188
Be mudas 2 6 1 1 2 1 2 6 1 2 2 26
B azil 1 1 1 2 1 1 7
Cayman Island 3 1 1 1 6
Chile 2 2 4
Denma k 6 12 4 10 31 1 58 4 12 2 6 5 21 8 15 2 197
Ge many 3 2 29 25 14 1 5 28 13 16 5 4 249 30 67 5 35 21 197 46 188 15 998
Finland 120 1 1 39 37 43 3 62 8 3 14 7 16 1 355
F ance 15 2 5 3 7 2 1 1 159 38 51 3 19 14 85 35 108 8 1 557
G eece 4 33 1172 122 7398 9 4 113 152
I eland 6 1 2 3 21 1 13 4 4 8 4 67
Iceland 2 1 3 3 1 1 1 3 15
I aly 1 2 13 6 4 15 5 3 1 35 31 13 4 14 10 31 9 38 3 1 239
Japan 3 1 1 1 12 5 8 1 7 1 10 8 58
Canada 3 2 3 1 1 24 9 56 1 5 6 25 9 18 6 169
Liech ens ein 1 1 1 2 2 1 1 9
Luxembou g 4 2 1 3 23 5 12 6 2 6 2 1 67
Mal a 13 1 5
Ne he lands 2 1 20 81388 6 11032634 1757526873 1435
No way 1 2 26 1 1 10 15 26 9 27 6 7 15 4 8 6 164
Aus ia 1 7 27 6 2 4 29 1 2 1 56 31 10 2 50 22 103 24 117 7 5 507
Panama 1 1
Po ugal 17 1 2 2 22
Swi ze land 17 41242 121341635361638222319 246
Spain 4 1 1 2 3 32 4 11 7 2 8 2 77
Sweden 3 5 67 1 7 32 33 82 8 56 1 5 7 33 8 16 10 1 375
Tu key 4 11 1 1 1 1 3 13 3 2 2 42
UK 5 4 36 2 11 10 3 21 15 12 4 4 140 42 192 4 21 30 135 31 85 44 6 857
USA 1 32 1 25 10 3 12 13 16 2 4 241 83 218 6 28 66 176 70 161 33 7 1,208
Venezuela 111 3
Cyp us 15 1 1 7 19 39 1 1 6 3 2 12 107
„Cen al and
Eas e n Eu ope“ 1 25 94 97 17 20 78 78 88 18 15 462 103 1,338 29 81 512 330 108 242 146 24 3,906
Sum 22 47 393 30 414 55 60 233 238 275 58 35 1 881 533 2,289 75 317 732 1,374 434 1,202 340 48
Sou ce: own
Tab. 1: Geog aphical assignmen o he acqui e and he acquisi ion a ge s
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214 2018, XXI, 4
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In app oxima ely 1,260 cases, he ans e ees
om Russia chose an acquisi ion a ge om
Russia (see Tab. 2). In o al, mos o he c oss-
bo de acquisi ions had i s a ge in Russia
(1,338). Russia also ea u es he companies
wi h majo i y o acquisi ion ambi ions.
4.2 Russia e sus Ge many Deals
The analysis o he capi al ma ke ’s eac ions
o he announcemen o a c oss-bo de
acquisi ion in Cen al and Eas e n Eu ope is
ocused only on Russian and Ge man public
lis ed companies.
In 206 cases, Ge man companies lis ed on
he s ock exchange announced c oss-bo de
acquisi ions o a Russian a ge o Russian
companies lis ed on he s ock exchange
announced c oss-bo de acquisi ions o
a Ge man a ge . This sample ma ks he basis
o he p esen s udy. Ou o he ansac ions,
only 56 cases do no deli e su icien da a
o empi ical analysis. The examina ion
o capi al ma ke ’s eac ions is made in
a ime ame o 20 days a ound he day o
announcemen . The examina ion ocus is on
he excess e u n ha is de e mined by he
Acqui e
Na ion
Ta ge Na ion
Sum
Albania
Bosnia and
He zego ina
Bulga ia
GDR (un il 1990)
Es onia
Geo gia
Yugosla ia
C oa ia
La ia
Li huania
Macedonia
Molda ia
Poland
Romania
Russia
Se bia
Slo ak Republic
Slo enia
Czech Republic
Czechoslo akia
(un il 1993)
Hunga y
Uk aine
Bela us
Albania 1 1
Bosnia-
He zego ina 31 4
Bulga ia 49 2 3 1 4 1 2 1 2 1 66
GDR* (un il 1990) 0
Es onia 65 30 25 13 1 1 3 138
Geo gia 6 3 9
Yugosla ia 1 1 1 1 4
C oa ia 7 5 33 1 3 11134 3 62
La ia 15 23 10 4 1 53
Li huania 1 4 10 19 3 2 1 4 2 46
Macedonia 2 2 4
Molda ia 1 1
Poland 1 4 2 12 417 7 10 2 10 2 10 10 2 489
Romania 1 1 56 1 1 1 61
Russia 1 18 9 6 1 7 11 19 3 13 7 11 1,260 4 4 16 8 12 72 17 1,499
Se bia 2 1 10 1 14
Slo ak Republic 1 1 1 1 2 26 6 27 1 3 4 73
Slo enia 9 8 22 7 3 1 2 10 7 494 2 2 567
Czech Republic 12 3 1 2 14 3 7 25 1 228 89 5 1 391
Czechoslo akia
(un il 1993) 116242 34
Hunga y 1 11 13 1 1 1 13 22 8 2 8 1 16 5 207 6 316
Uk aine 1 2 2 3 19 6 3 38 74
Bela us 0
Sum 1 25 94 0 97 17 20 78 78 88 18 15 462 103 1,338 29 81 512 330 108 242 146 24
Sou ce: own
No e: * Ge man Democ a ic Republic
Tab. 2: Geog aphical assignmen o he ans e ees and he acquisi ion a ge s wi hin
“Cen al and Eas e n Eu ope” g oup
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di e ence be ween he an icipa ed and he
ealized e u n.
The analysis o abno mal excess e u ns
(see Fig. 2, up) shows no signi i can de l ec ion
o e u ns a any day in he e en pe iod.
The e o e, he analysis o cumula ed abno mal
excess e u ns mus be discussed.
The obse a ion o cumula ed excess
e u ns (see Fig. 2, down) shows a posi i e
signal on capi al ma ke s wi h espec o
announcemen s o c oss-bo de akeo e s. In
he examina ion pe iod o 20 days a ound he
momen o announcemen , he o e all e u n
o 3% could ha e been ealized. Howe e , he
alue is s a is ically no signi i can . On a sa e y
le el o 90%, he e u n o 1.57% could ha e
been no ed in a ime ame o i e days a ound
he day o announcemen .
The analysis o capi al ma ke ’s eac ion
(see Tab. 3) shows ha he capi al ma ke
alues he c oss-bo de in es men be ween
Russian and Ge man companies posi i ely.
Howe e , i should be no ed ha i ndings
gained a e exclusi ely based on he capi al
ma ke ’s expec a ions and he conduc ed
s udies co e a sho ime pe iod. In his sense,
we canno deduce gene al s a emen s abou
he ac ual long- e m success o company
akeo e s in Ge man o Russian ma ke . The
esul s, howe e , indica e ha capi al ma ke
Fig. 2: Abno mal and cumula ed abno mal e u ns in c oss-bo de acquisi ions
Sou ce: own
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Mul ina ional Financial Managemen , 21(1), 18-
39. h p s://doi.o g/10.1016/j.mul i n.2010.12.004.
Zhu, P., Jog, V., & O che e, I. (2014).
Idiosync a ic ola ili y and me ge s and
acquisi ions in eme ging ma ke s. Eme ging
Ma ke s Re iew, 19, 18-48. h p s://doi.
o g/10.1016/j.emema .2014.04.001.
Ing. Tim Langens ein
Technical Uni e si y o Kosice
Facul y o Economics
Slo akia
[email p o ec ed]
Ing. Anna Voj ko á, PhD.
Be lin Ins i u e o Finance, Inno a ion
and Digi aliza ion
Ge many
anna. oj ko a@bi i d.sk
P o . D . Ma in Užík
Be lin School o Economics and Law
Be lin Ins i u e o Finance, Inno a ion
and Digi aliza ion
Ge many
[email p o ec ed]
And eas Ruepp LLM
Be lin Ins i u e o Finance, Inno a ion
and Digi aliza ion
Ge many
and eas. uepp@bi i d.o g
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4, XXI, 2018
Finance
Abs ac
CROSS-BORDER ACQUISITIONS IN CENTRAL AND EASTERN EUROPE WITH
FOCUS ON RUSSIA VERSUS GERMANY DEALS: AN EMPIRICAL ANALYSIS
Tim Langens ein, Anna Voj ko á, Ma in Užík, And eas Ruepp
Globaliza ion, de egula ion and he a endan libe aliza ion o capi al ma ke s ha e made c oss
bo de me ge s and acquisi ions a ac i e o i ms seeking o s a egically posi ion hemsel es
wi hin he global economy o ake ad an age o he oppo uni ies ha globaliza ion o e s. As
a esul , c oss-bo de acquisi ion and me ging ac i i ies ha e inc eased d ama ically o e he
ecen decades. Because o he all o he “i on cu ain” and he p oceeds o Eu opean in eg a ion,
mainly he Eu opean single ma ke has c ea ed new possibili ies. Mo eo e , one o he main esul s
o globaliza ion is a g ea e ole o eme ging ma ke s in he global economy, especially in he a ea
o o eign di ec in es men . The pape he e o e analyses announced and comple ed c oss bo de
acquisi ions be ween a public lis ed acqui e and a ge companies om Cen al and Eas e n Eu ope
and associa ed eac ions o he capi al ma ke s. The analysis ocuses, in pa icula , on c oss-bo de
Russia e sus Ge many deals. Examining he sample o 11,085 announced deals o e he pe iod
om Janua y 1990 h ough Decembe 2014, he analysis poin s ou some impo an ends in he
global economy in he a ea o companies acquisi ion and me ging ac i i ies. In summa y, i can
be emphasized ha Cen al and Eas e n Eu ope as he egion is e y a ac i e om he ma ke ’s
pe spec i e due o he expec ed g ow h a es and he amewo k condi ions as well as om he
pe spec i e o Wes e n Eu opean in es o s. Analysis esul s indica e ha Russian ma ke is be e
in he a ea o c oss-bo de acquisi ions han emaining Cen al and Eas e n Eu opean ma ke s. I
allows us o sugges ha i is wo hie in es ing in Russia han in emaining Cen al and Eas e n
Eu ope.
Key Wo ds: C oss bo de acquisi ions, abno mal e u n, Cen al and Eas e n Eu ope.
JEL Classi i ca ion: C39, C49, F65, P45.
DOI: 10.15240/ ul/001/2018-4-014
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