The effects of cultural distance and shareholder protection on cross-border mergers and acquisitions

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Master Thesis

The Effects of Cultural Distance and Shareholder Protection

on Cross-Border Mergers and Acquisitions

Elianne R. Stoop

Student number: 10053670

Supervisors: prof. F. Lopez-de-Silanes, mr. T. Homar

MSc Business Economics, Finance track

Amsterdam Business School

University of Amsterdam

July 2014

ABSTRACT

I investigate the influence of cultural distance and shareholder protection on the volume of

cross-border mergers and acquisitions. Using a sample of 42,004 cross-cross-border M&A between 2004 and

2012, I find strong evidence that differences between countries in national culture and the strength

of shareholder protection affect cross-border M&A volume. The volume of cross-border M&A

between countries is lower when these countries are more culturally distant. A larger positive

difference between the acquirer and target countries in the strength of shareholder protection is

associated with a larger volume of cross-border M&A.

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Table of contents

1. Introduction ... 3

2. Literature review ... 7

2.1. National culture and cross-border M&A... 7

2.2. Shareholder protection and cross-border M&A ... 9

2.2.1. Anti-director rights index ... 11

2.2.2. Securities laws: disclosure in the prospectus index and prospectus liability index... 12

2.2.3. Anti-self-dealing index and public enforcement index ... 13

2.2.4. The quality of enforcement ... 14

3. Empirical methodology ... 14

4. Data sources ... 16

4.1. M&A data ... 16

4.2. Empirical measures of cultural distance ... 16

4.3. Empirical measures of shareholder protection ... 17

4.4. Other factors that affect M&A ... 18

4.5. Summary statistics ... 19

5. Results ... 21

5.1. The effect of cultural distance on cross-border M&A volume ... 22

5.2. The effect of shareholder protection on cross-border M&A volume ... 25

5.2.1. Revised Anti-Director Rights ... 25

5.2.2. Anti-Self-Dealing Index... 28

5.2.3. Prospectus Liability ... 30

5.2.4. Disclosure in the Prospectus ... 32

5.2.5. Public Enforcement Index ... 34

6. Robustness checks ... 36

6.1. Alternative measure of cultural distance ... 36

6.2. Additional sample restrictions ... 38

6.3. Alternative specifications of the dependent variable ... 40

7. Conclusion ... 43

Appendix A ... 47

Appendix B ... 48

Appendix C ... 49

Appendix D ... 56

References ... 59

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1. Introduction

The volume of cross-border mergers and acquisitions (M&A) has been growing globally, from 23% of

total M&A volume in 1998 to 36.5% in 2012 (Thomson Reuters, 2012). Cross-border M&A occur for

the same reasons as domestic ones: efficiency gains, a reduction in the cost of capital, the opportunity

for the acquirer to expropriate stakeholders of the target, agency problems, and hubris are all possible

explanations for why companies choose to merge. However, compared to domestic M&A,

cross-border M&A are associated with additional factors that might affect M&A volume. Two important

factors in this respect are differences in national culture and shareholder protection between the

acquirer and target countries of domicile.

Cultural differences are likely to play an important role in cross-border M&A, since people with

different cultural values have to coordinate with each other (Ahern et al., 2012). However, research

on the impact of cultural distance on cross-border M&A is still limited and provides little consensus.

For example, Morosini et al. (1998) state that value can be created by engaging in M&A with firms in

culturally distant countries, which increases the likelihood of observing M&A between these countries.

Ahern et al. (2012) state the opposite and suggest that a greater cultural distance reduces synergy

gains, which reduces the likelihood that firms choose to merge. In correspondence to the latter

statement, I hypothesize that a greater cultural distance between countries reduces the likelihood of

observing M&A between these countries. Therefore my first research question states: ‘What is the

influence of national cultural distance on cross-border M&A volume?’

To answer this research question, I use a measure of cultural distance that is based on six dimensions

of national culture, developed by Hofstede (1980) and Hofstede et al. (2010).

Besides cultural differences, cross-border M&A are also associated with differences in shareholder

protection between the acquirer and target countries of domicile. If the extreme version of the

Coasian view holds, cross-country differences in legal rules are completely irrelevant, since market

participants will organize their transactions in ways that achieve efficient outcomes. Consequently, in

equilibrium, all companies provide the same degree of investor protection, assuming that property

rights are well defined and transaction costs are zero (Glaeser et al., 2001). However, evidence on

minority shareholder expropriation is widespread (see La Porta et al. (LLSV) (1998, 2002) and Djankov

et al. (DLLS) (2008)) . Better protection of minority shareholders reduces the amount of expropriation

by controlling shareholders or managers, which increases firm value (LLSV, 2002). Hence, if a target

company is acquired by a company originating from a country with better shareholder protection than

the target’s country of domicile, the target firm might be worth more after being acquired (Bris and

Cabolis, 2008), and value can be created through the acquisition (Erel et al., 2012). I therefore

hypothesize that a greater positive difference between the acquirer and target countries of domicile

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increases the likelihood that firms from these countries choose to merge. This hypothesis will be

tested in this paper, and hence my second research question states: ‘What is the influence of

cross-country differences in shareholder protection on cross-border M&A volume?’

To answer this research question, I use four different measures of shareholder protection. These

measures are based on the protection that the law of a certain country provides to its shareholders,

as well as on a measure of the quality of enforcement of the law in this country (called efficiency of

the judicial system). The shareholder protection that a country’s law provides is measured and

summarized in four different indices: 1. The revised director rights index (DLLS, 2008); 2. The

anti-self-dealing index (DLLS, 2008) 3. The prospectus liability index (La Porta et al. (LLS), 2006); and 4. The

disclosure in the prospectus index (LLS, 2006). In addition, I examine the effect of public enforcement,

in terms of the sanctions (fines and/or prison terms) applicable to the parties involved in self-dealing

transactions in which all disclosure and approval requirements are met, on cross-border M&A volume.

The measure of public enforcement is the public enforcement index (DLLS, 2008).

In this paper, I provide large-scale evidence on the extent to which cultural distance and differences

in shareholder protection between countries affect the decision of firms to merge. I do this by using a

comprehensive sample of 42,004 cross-border M&A, observed from 2004 through 2012. This sample

consists of M&A in which a majority (i.e. 51%) of the target firms’ shares was acquired, and involves

both public and private firms, which originate from 79 different countries. I show that both differences

in national culture and in shareholder protection across countries affect cross-border M&A volume.

First, I find that a greater cultural distance between two countries is associated with a lower

probability that firms originating from these countries choose to merge. Ahern et al. (2012), who were

the first to conduct a comprehensive study of the effect of cultural distance on M&A volume, find

similar results, despite following an approach that is fairly different from the approach followed in this

paper. First, Ahern et al. (2012) measure cultural distance using three dimensions of national culture,

while my cultural distance measure is based on six dimensions. Second, in contrast to Ahern et al.

(2012), the measure of cross-border M&A volume that I use allows for implicitly controlling for factors

that can influence both domestic and cross-border M&A volume. Furthermore, Ahern et al. (2012)

measure M&A volume using the transaction values of cross-border M&A between a country pair,

while data on these transaction values is unavailable for more than 60% of total M&A. I measure

cross-border M&A volume using the number of M&A between ordered country pairs instead of their

transaction values, leading to a sample that reflects the universe of cross-border M&A. However,

despite these different approaches, the negative effect of cultural distance on M&A volume found in

this paper confirms the findings of Ahern et al. (2012).

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Furthermore, I find that a positive difference between the acquirer and target countries of domicile in

the strength of shareholder protection is positively associated with the likelihood of observing M&A

between firms of these countries. I find that these differences in shareholder protection are important

determinants of cross-border M&A volume. I show that acquirer companies tend to originate from

countries with relatively strong shareholder protection, while target firms usually are from countries

with relatively weak shareholder protection. These findings are in line with Rossi and Volpin (2004),

who find similar results using a sample of publicly traded companies. Rossi and Volpin (2004) measure

shareholder protection using several indices (i.e. the original anti-director rights index and rule of law),

developed by LLSV (1998).

The results found in this paper support the view that the shareholder protection of target firms can

improve by merging with more protective acquirers, and that value can be created through these

M&A. For instance, Bris and Cabolis (2008) find that shareholders of the target company positively

value improvements in shareholder protection through M&A, resulting in a higher merger premium

when the shareholder protection of the acquirer is stronger than the target’s. In addition, Bris et al.

(2008) show that the Tobin’s Q of entire industries increases when firms in these industries are

acquired by companies originating from countries with better shareholder protection. These findings

suggest that value can be created through these M&A, which explains the positive relationship

between cross-border M&A volume and positive differences in shareholder protection between

acquirer and target, which I find in this paper.

In contrast to the relationship found between shareholder protection and cross-border M&A volume,

I find no relationship between (differences in) public enforcement and cross-border M&A volume.

I also examine the effects of differences in national culture and shareholder protection in subsamples

of M&A involving only public and only private acquirers, respectively. Aforementioned effects of

cross-country differences in national culture and shareholder protection are present in both subsamples,

where cultural distance has the largest effect on the volume of M&A involving private acquirers.

Differences in shareholder protection between acquirer and target have the largest effect on the

volume of M&A involving public acquirers.

Furthermore, I show that the measure of cultural distance used in this paper explains cross-border

M&A volume better than the, in the existing literature, commonly used measure that is based on the

first four of Hofstede’s (1980) dimensions of national culture and the Kogut and Singh (1988) index.

I also provide evidence regarding the relationship between countries’ legal origins and cross-border

M&A volume. According to LLSV (1998), legal origin is a broad indicator of shareholder protection, and

countries with an English common law system tend to have stronger shareholder protection than

(French, German or Scandinavian) civil law countries (see LLSV (1998), LLS (2006) or DLLS (2008)). In

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line with aforementioned results regarding the effects of shareholder protection on cross-border M&A

volume, I find that cross-border M&A volume is larger when the acquirer country has a common law

system, and that the opposite holds for the target country.

This paper provides several contributions to the existing literature. First, given the strong growth in

the number of border M&A during the last decade and the rising global expectation that

cross-border M&A will drive acquisitive growth (Grant Thornton, 2013), understanding cross-cross-border M&A

is becoming increasingly important. However, the majority of the existing literature in the field of M&A

focuses on domestic M&A between public firms in the United States (Erel et al., 2012). Publicly traded

firms in the U.S. are not representative of M&A in general, since the majority of M&A involve

non-U.S., private firms (Erel et al., 2012).

Also, cultural distance and country-level differences in

shareholder protection are not relevant and hence not addressed in this literature. Examining their

role in cross-border M&A will add to our understanding of cross-border M&A.

Furthermore, recent research provides evidence regarding factors that affect cross-border M&A, like

geography, bilateral trade and currency movements (Erel et al., 2012). These factors are not controlled

for in the existing literature that examines the effect of shareholder protection on cross-border M&A

outcomes (see e.g. Bris and Cabolis (2008) and Rossi and Volpin (2004)), although this is necessary to

isolate this effect. The same applies to the majority of the existing literature that examines the effect

of cultural distance on cross-border M&A. In this paper, I control for these factors, thereby improving

the internal validity with respect to the related literature. Another improvement involves the sample

used in this paper. This sample, which consists of 42,004 cross-border M&A, is, to the best of my

knowledge, more comprehensive than the samples used in the related literature and the firms

involved originate from a larger (i.e. 79) number of countries. In contrast to the majority of the existing

literature that investigates the relationship between shareholder protection and M&A (e.g. Bris and

Cabolis (2008), Bris et al. (2008) and Rossi and Volpin (2004)) or cultural distance and M&A (e.g.

Chakrabarti et al. (2009) and Morosini et al. (1998)), no restrictions were imposed regarding the public

status of the companies in the sample. The sample period, which is from 2004 through 2012, is also

more recent. This benefits the quality of this study, since the availability and quality of data provided

by the main source of M&A data (Securities Data Corporation Mergers and Acquisitions database

(SDC)), improves over time (Rossi and Volpin, 2004).

Furthermore, I use a newly created measure of cultural distance that works better in explaining the

effect of cultural differences on M&A volume than the commonly used measure of cultural distance.

Also, by testing multiple different shareholder protection measures, I provide extensive evidence on

the effect of (cross-country differences in) shareholder protection on cross-border M&A volume. This

is important, considering the limited amount of evidence provided by the existing literature. I also

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show that these shareholder protection measures consistently predict the volume of cross-border

M&A, and that each measure can be used by researchers to investigate the effect of shareholder

protection on cross-border M&A volume.

Finally, the commonly used measure of shareholder protection is the original anti-director rights

index, constructed by LLSV (1998). However, this index was criticized by several different authors and

should not be used as a measure of shareholder protection anymore, but the revised anti-director

rights index (DLLS, 2008) should be used instead (prof. F. Lopez-de-Silanes, 2014). However, the

majority of the existing literature that investigates the effect of shareholder protection on

cross-border M&A outcomes uses the original anti-director rights index as a measure of shareholder

protection (see Bris and Cabolis (2008) and Rossi and Volpin (2004)). In this paper, I address this

concern and use the revised anti-director rights index.

The remainder of this paper is organized as follows. Section 2 discusses existing literature on cultural

distance, shareholder protection, and cross-border M&A. Section 3 describes the empirical

methodology. Section 4 describes the data used in this paper. Section 5 presents the results, while

Section 6 presents robustness checks. Finally, Section 7 concludes.

2. Literature review

2.1. National culture and cross-border M&A

National culture, which can be defined as “the collective programming of the mind, distinguishing the

members of one group or category of people from others” (Hofstede, 1980), affects many different

financial outcomes in markets around the world. For example, Guiso et al. (2009) find that cultural

distance affects bilateral trust, which in turn affects bilateral trade and investment, both directly and

through equity markets. Bloom et al. (2012) find that organizational culture is affected by national

culture, in terms of decentralization and firm size. Kumar and Nti (2004) find that the functioning of

international alliances is affected by interpretational, attributional and behavioral conflicts, arising

from cultural differences between the partners. Ambos and Ambos (2009) find that cultural distance

reduces the effectiveness of knowledge transfers via personal coordination mechanisms.

Cultural differences are likely to play a particularly important role in cross-border M&A, since people

with different cultural values have to coordinate with each other (Ahern et al., 2012). In this respect,

Ahern et al. (2012) state that integration is crucial to merger success, and that coordination between

employees of the target and acquirer companies is central to successful integration. They argue that

differences in cultural values between these employees reduces this coordination, which leads to

increased integration costs and hence lower synergy gains. Consequently, M&A volume should be

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lower between culturally distant countries. Indeed, Ahern et al. (2012) find that national cultural

distance negatively affects M&A volume and the resulting value creation. They measure cultural

distance based on three dimensions of national culture (trust, hierarchy and individualism).

In contrast, Morosini et al. (1998) state that firms can possess a greater variety of potentially valuable

routines and repertoires by engaging in M&A with firms in culturally distant countries. They find a

positive association between national cultural distance and cross-border M&A performance, which

implies that national cultural distance has a positive effect on cross-border M&A volume. Like the

majority of the existing literature in this field, Morosini et al. (1998) use Hofstede’s (1980) first four

dimensions of national culture to measure cultural distance: Power Distance (PDI), Individualism

versus Collectivism (IDV), Masculinity versus Femininity (MAS) and Uncertainty Avoidance (UAI). These

dimensions are groups of values that distinguish countries’ national cultures from each other

(Hofstede et al., 2010).

Power distance is defined as “the extent to which the less powerful members of organizations and

institutions (like the family) accept and expect that power is distributed unequally” (Hofstede, 1980).

Individualism versus collectivism indicates “the degree to which individuals are integrated into

groups”. A low degree indicates individualism, while a high degree indicates collectivism. Masculinity

versus femininity refers to “the distribution of emotional roles between the genders”. Masculine

cultures are characterized by cultural values like competitiveness, heroism, assertiveness, ambition,

power, and materialism. In feminine cultures, relationships, modesty, caring for others, and quality of

life are more important. Uncertainty avoidance refers to the extent to which a society feels

(un)comfortable with uncertainty and ambiguity, and how a society deals with uncertainty about the

future (Hofstede et al., 2010).

The majority of the existing literature uses these dimensions to measure cultural distance between

countries. The difference between two countries’ scores on each of these four dimensions are used

as inputs in an index created by Kogut and Singh in 1988 (see Appendix A), to determine the cultural

distance between these countries. For instance, Datta and Puia (1995) follow this approach to examine

the impact of cultural distance on short-term wealth effects resulting from cross-border M&A. They

find that cross-border M&A, on average, do not create value and that cultural distance reduces wealth

of the acquiring firm’s shareholders. Chakrabarti et al. (2009) also follow this approach to measure

the effect of cultural distance on long-run M&A performance. They find that cross-border M&A

perform better in the long run when target and acquirer originate from countries that are more

culturally distant.

However, Hofstede (1980) has been widely criticized for being influenced by his own Dutch culture,

which translated into ‘Western questionnaires’. Yet, these questionnaires were used to examine

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national cultural values globally, which led to extensive criticism on the validity and limitations of the

first four dimensions as a framework for national culture. Michael Bond, a Canadian researcher who

lived in China, found a solution to this ‘Western bias’ problem. He created a list composed of basic

values for Chinese people with the help of his Chinese colleagues, taking into account the Chinese

(Confucian) cultural inheritance, and called it the Chinese Value Survey (CVS). The results again

revealed the existence of PDI, IDV and MAS, but not of UAI. The fourth CVS dimension instead

described a society’s time horizon: whether a society attaches more importance to the past and

present (short-term orientation), or to the future (long-term orientation). This led Hofstede to adopt

the fifth cultural dimension, which he called ‘long-term versus short-term orientation’ (LTO) (Hofstede

et al., 2010). Later, Misho Minkov unraveled from the World Values Survey a sixth dimension, which

he called ‘Indulgence versus Restraint’ (IVR). The definition that Hofstede et al. (2010) propose for this

dimension is as follows: ‘’indulgence stands for a tendency to allow relatively free gratification of basic

and natural human desires related to enjoying life and having fun. Its opposite pole, restraint, reflects

a conviction that such gratification needs to be curbed and regulated by strict social norms’’ (Hofstede

et al., 2010). IVR became the sixth cultural dimension. The addition of these last two dimensions solves

the Western bias problem and helps to explain how the values of the members of a society are

influenced by its national culture (Hofstede et al., 2010). Consequently, they might be useful in

explaining the effect of national cultural distance on cross-border M&A volume. I therefore use

differences in countries’ scores on all six cultural dimensions as inputs for an adjusted version of the

Kogut and Singh (1988) index (see Appendix A), to create a new measure of cultural distance. If the

addition of the last two dimensions indeed helps to better explain cultural distance between countries,

this newly assembled measure might work better in explaining the effect of national cultural

differences on M&A volume than the commonly used measure of cultural distance. It is shown

empirically in Section 6 that this is indeed the case.

2.2. Shareholder protection and cross-border M&A

According to the Modigliani and Miller (1958) theorem, the value of securities depends on their cash

flows. However, the value of a security depends not only on its cash flows, but also on the rights

attached to it, like voting rights in case of common stock (LLSV, 1998). According to the agency theory

(see Jensen and Meckling, 1976), managers tend to maximize their own utility at the expense of the

shareholders’ utility. When managers act in their own interest, voting rights become important

because they give shareholders the power to extract from these managers the return on their

investment (LLSV, 1998). However, the rights that shareholders have and the strength of the

protection of these rights depends on the legal rules of the jurisdiction in which the shares were

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issued, and the quality of their enforcement (LLSV, 1998). When shareholders receive a strong

protection, they are more willing to provide capital. Hence, differences in shareholder protection

across countries help to explain differences in initial public offering (IPO) volume, the development of

the stock market, and ownership concentration (DLLS, 2008), as well as voting premia and

control-block votes (Nenova, 2003). If shareholder protection is weak, controlling shareholders can more

easily realize private benefits at the expense of minority shareholders. Nenova (2003) interprets the

value of control-block votes as the lower bound for private benefits of the controlling shareholder.

Hence, the weaker a country’s shareholder protection, the easier and less costly it is to expropriate

minority shareholders and realize private benefits, and thus the higher the value of control-block

votes. Furthermore, if shareholder protection in a country is weak, minority shareholders might not

be able to ensure a return on their investments and hence do not hold shares in these countries,

leading to high ownership concentration (LLSV, 1998).

These findings suggest that stronger shareholder protection is associated with higher firm values.

Indeed, LLSV (2002) find evidence of higher valuation of firms in countries with better protection of

minority shareholders. Hence, shareholder protection might play an important role in explaining M&A

activity as well. In this respect, Rossi and Volpin (2004) find that the total volume of M&A is

significantly larger in countries with stronger shareholder protection. Using a sample of publicly traded

companies, they also find that target companies typically are from countries with relatively weak

shareholder protection and that acquirer countries tend to have relatively strong shareholder

protection. Rossi and Volpin (2004) measure shareholder protection using different indices (i.e. the

anti-director rights index and rule of law), constructed by LLSV in 1998. Bris and Cabolis (2008) show

that cross-country differences in shareholder protection influence the value of the merger premium

in cross-border M&A. They measure changes in corporate governance quality induced by cross-border

M&A by taking differences in measures of investor protection between the acquirer and target

countries of origin. The shareholder protection measures that they use are also based on indices

developed by LLSV (1998). They find that a higher level of investor protection in the acquirer’s country

relative to the target’s country of domicile is associated with a higher merger premium in cross-border

M&A, relative to matching domestic M&A. In addition, Bris et al. (2008) show that value of entire

industries, including the companies that did not engage in M&A, increases when firms in these

industries are acquired by companies originating from countries with better shareholder protection.

The value of these industries is measured by their Tobin’s Q.

These results suggest that if a target company is acquired by a company originating from a country

with better shareholder protection than the target’s country of domicile, the target firm might be

worth more after being acquired (Bris and Cabolis, 2008), and value can be created through the

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acquisition (Erel et al., 2012). I therefore expect to find a positive relationship between cross-border

M&A volume and positive differences in shareholder protection between the acquirer and target

countries of domicile.

Before this hypothesis is tested, different measures of shareholder protection provided by the existing

literature are discussed: the (revised) anti-director rights index, the disclosure in prospectus index, the

prospectus liability index and the anti-self-dealing index. The public enforcement index and a measure

of the quality of countries’ law enforcement, called efficiency of the judicial system, are explained as

well.

2.2.1. Anti-director rights index

LLSV (1998) examine empirically how laws protecting investors and the quality of enforcement of

these laws differ across 49 countries that have publicly traded companies. These legal rules associated

with shareholder rights determine the ease with which shareholders can exercise their powers against

the management (LLSV, 1998). LLSV (1998) determine the strength of the protection that the law of a

certain country provides to its shareholders across different dimensions, and summarize it in an index

called the anti-director rights index. This index is commonly used in the existing literature to measure

the strength of countries’ shareholder protection. However, in response to criticism of several authors

on this index, DLLS (2008) created a revised version of the original anti-director rights index. Besides

the fact that this revised anti-director rights index takes into account the concerns associated with the

original anti-director rights index, it is also available for a larger sample of countries (72 versus 49 in

LLSV (1998)). Both indices cover the same areas: 1. Vote by mail; 2. Obstacles to the exercise of voting

rights; 3. Minority representation on the Board of Directors through cumulative voting or proportional

representation; 4. An oppressed minority mechanism to seek redress in case of expropriation; 5.

Pre-emptive rights to subscribe to new securities issued by the company and; 6. The right to call a special

shareholder meeting (DLLS, 2008)). These areas are summarized in sub-indices, which together make

up the (revised) anti-director rights index. There are some conceptual differences and differences in

coding between the sub-indices of the original and the revised anti-director rights index, and I will

limit myself to briefly discussing the sub-indices of the revised anti-director rights index.

The first sub-index, vote by mail, reflects the difficulty for shareholders of making informed votes by

mail. The second sub-index, shares not deposited, indicates whether the law of a country requires, or

permits companies to require, that shareholders deposit their shares with the company prior to a

general shareholders’ meeting. Such a requirement forces shareholders to prove their right to vote,

and hence forms an obstacle to the exercise of voting rights. The third sub-index, cumulative voting,

indicates whether the law of a country requires companies to allow cumulative voting for one board

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of directors candidate by shareholders owning 10% or less of the capital, or whether these

shareholders may name a proportional number of directors to the board. Hence, this sub-index

reflects the power of controlling shareholders to dominate the board of directors.

The fourth sub-index, oppressed minority, reflects the difficulty faced by shareholders owning 10% or

less of the company’s capital in challenging decisions that benefit controlling shareholders, but

damage the company. The fifth sub-index, pre-emptive rights, indicates whether the law requires that

shareholders have a pre-emptive right to buy newly issued shares, which lowers the opportunity for

insiders to expropriate minority shareholders. Finally, the lower the percentage of share capital

needed to call a shareholders’ meeting, the easier it is for minority shareholders to organize one. The

last sub-index, capital to call a meeting, indicates whether a country’s law requires that a single

shareholder, holding 10% or less of a company’s capital, can call a shareholders’ meeting.

These sub-indices each range from 0 to 1 and together make up the revised anti-director rights index,

which thus ranges from 0 to 6. The higher a country’s score on this index, the stronger is its

shareholder protection.

2.2.2. Securities laws: disclosure in the prospectus index and prospectus liability index

La Porta et al. (LLS) (2006) examine the securities laws of 49 countries, how these regulate the issuance

of new equity to the public, and what the effect of these laws is on the development of the stock

market.

If investors consider buying stocks in IPOs, they face the risk of buying bad securities. An efficient

system provides the issuers, distributors and accountants in IPOs with the right incentives to collect

and present information to investors and hold them liable if they do not (LLS, 2006). If a country’s

securities law describes requirements regarding disclosure in the prospectus, thereby standardizing

contracts, it is easier for investors to recover damages when information is wrong or omitted from the

prospectus. LLS (2006) measure and summarize the strength of these disclosure requirements in the

disclosure in the prospectus index. This index covers six different sub-indices. The first sub-index

indicates whether or not a country’s law prohibits selling securities that are going to be listed on the

country’s largest stock exchange without first delivering a prospectus to potential investors. The

remaining sub-indices reflect the countries’ disclosure requirements in five different areas: 1. Insiders’

compensation; 2. Ownership by large shareholders; 3. Inside ownership; 4. Contracts outside the

normal course of business; and 5. Transactions with related parties. These six sub-indices each range

from 0 to 1 and the disclosure in the prospectus index equals the arithmetic mean of these sub-indices,

which thus ranges from 0 to 1 as well.

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Furthermore, if bad news about the company comes out after the IPO, the question is whether this

information was or could have been known by the issuer, the distributor and/or the accountant. LLS

(2006) measure and summarize the countries’ levels of burden of proof for plaintiffs in a civil liability

case in an index called the prospectus liability index. This index is based on three sub-indices, which

reflect the procedural difficulty faced by plaintiffs in recovering losses from 1. The directors; 2. The

distributor; and 3. The accountant in a civil liability case for losses due to misleading statements in the

prospectus (in case of directors and the distributor) or in the audited financial information

accompanying the prospectus (in case of the accountant), respectively. These three sub-indices each

range from 0 to 1, and the prospectus liability index equals the arithmetic mean of these sub-indices,

which thus ranges from 0 to 1 as well. Hence, the higher the burden of proof faced by plaintiffs who

want to recover their losses in a prospectus liability case, the lower the country’s score on this index.

2.2.3. Anti-self-dealing index and public enforcement index

DLLS (2008) describe a hypothetical self-dealing transaction in which all disclosure and approval

requirements of the countries in the sample are met, but which nonetheless hurts one of the

companies involved. Then they examine these countries’ ex ante as well as ex post private

enforcement mechanisms. Ex ante private control of self-dealing is based on two different areas: 1.

Approval and; 2. Disclosure requirements before the deal goes through. These areas are summarized

in two sub-indices (approval by disinterested shareholders and ex-ante disclosure, respectively), which

both range from 0 to 1. The index of ex ante private control of self-dealing equals the arithmetic mean

of these two sub-indices.

Ex post private control of self-dealing is based on two different areas: 1. Disclosure requirements and;

2. The ease or difficulty of proving the wrongdoing after the deal has gone through. Both areas are

again summarized in sub-indices, whereas the latter sub-index (ease of proving wrongdoing) equals

the mean of five different litigation variables. Both sub-indices range from 0 to 1 and the index of ex

post private control of self-dealing equals the arithmetic mean of these two sub-indices. The

anti-self-dealing index equals the arithmetic mean of the indices of ex ante private control of self-anti-self-dealing and

ex post private control of self-dealing. This index helps to answer the following question for the

countries in the sample: “if a controlling shareholder wants to enrich himself but also to follow the

law, how difficult is it for minority shareholders to thwart the deal before it goes through and to

recover damages if it is carried out?” (DLLS, 2008). The anti-self-dealing index ranges from 0 to 1.

Finally, DLLS (2008) present the public enforcement index. This index is based on the sanctions (fines

and/or prison terms) that may be applicable to the manager/controlling shareholder that engages in

a self-dealing transaction, such as the hypothetical one described by DLLS (2008) in which all disclosure

14

and approval requirements are met, and those in charge of approving the transaction (DLLS, 2008). It

hence does not reflect the sanctions applicable in cases of corporate crime. The public enforcement

index ranges from 0 to 1.

2.2.4. The quality of enforcement

The measures of shareholder protection described above are based on the legal rules of countries.

However, the quality of enforcement of these legal rules might be at least as important. If a country

has weak rules protecting shareholders, a strong system of legal enforcement could form a substitute

for these rules (LLSV, 1998). LLSV (1998) construct several measures of the quality of enforcement of

these legal rules. Two of these measures are ‘efficiency of the judicial system’ and ‘rule of law’. Indeed,

LLSV (1998) find that the quality of legal enforcement is strongly negatively correlated with ownership

concentration. This result suggests that shareholder protection is higher in countries with a high

quality of law enforcement, since minority shareholders tend to invest in countries in which they are

able to ensure a return on their investments, which depends on strength of shareholder protection in

those countries. If the enforcement of legal rules is an element of shareholder protection that is at

least as important as the rules themselves, it might be an important determinant of cross-border M&A

volume as well. Therefore, the quality of countries’ law enforcement, which is measured as these

countries’ efficiency of the judiciary, will be part of the measures of shareholder protection used in

this paper.

3. Empirical methodology

Value creation in M&A requires post-M&A coordination between the employees of the firms involved.

Differences in cultural values could reduce this coordination and consequently reduce synergy gains

(Ahern et al., 2012). Furthermore, cultural differences could increase the contracting costs associated

with cross-border M&A (Erel et al., 2012). A greater cultural distance should therefore, ceteris paribus,

decrease the likelihood that two firms choose to merge (Erel et al., 2012). Therefore, my first

hypothesis is stated as follows:

Hypothesis 1: a greater cultural distance between the acquirer and target companies’ countries of

domicile is associated with a smaller volume of cross-border M&A.

Besides cultural differences, cross-border M&A are also associated with differences in shareholder

protection between the acquirer and target countries of domicile. Better protection of minority

shareholders reduces the amount of expropriation by controlling shareholders or managers, which

15

increases firm value (La Porta et al., 2002). Hence, if a target company is acquired by a company

originating from a country with better shareholder protection than the target’s country of domicile,

the target firm might be worth more after being acquired (Bris and Cabolis, 2008), and value can be

created through the acquisition (Erel et al., 2010). Consequently, a greater positive difference in

shareholder protection between the acquirer and target countries of domicile might be associated

with a larger volume of M&A between these countries. Hence, my second hypothesis is stated as

follows:

Hypothesis 2: a greater positive difference in shareholder protection between the acquirer and target

companies’ countries of domicile is associated with a larger volume of cross-border M&A.

The following equation, and different versions of this equation, will be used to test these hypotheses:

𝑀&𝐴 𝑣𝑜𝑙𝑢𝑚𝑒

_{𝑖𝑗,𝑡}

= 𝛽

₀

+ 𝛽

₁

(𝐶𝑢𝑙𝑡𝑢𝑟𝑎𝑙 𝑑𝑖𝑠𝑡𝑎𝑛𝑐𝑒)

_𝑖𝑗

+ 𝛽

₂

(𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 𝑝𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛)

_𝑗−𝑖

+ (𝐶𝑜𝑢𝑛𝑡𝑟𝑦 − 𝑝𝑎𝑖𝑟 𝑐𝑜𝑛𝑡𝑟𝑜𝑙𝑠)

𝑖𝑗,𝑡

+ (𝑇𝑎𝑟𝑔𝑒𝑡 𝑐𝑜𝑢𝑛𝑡𝑟𝑦 𝑐𝑜𝑛𝑡𝑟𝑜𝑙𝑠)

𝑡

+ (𝐴𝑐𝑞𝑢𝑖𝑟𝑒𝑟 𝑐𝑜𝑢𝑛𝑡𝑟𝑦 𝑐𝑜𝑛𝑡𝑟𝑜𝑙𝑠)

𝑡

+ 𝜀

𝑖𝑗,𝑡

The dependent variable, M&A volumeij,t, is defined as the number of cross-border M&A in year t (Xij,t)

between target country i and acquirer country j (where i ≠ j), scaled by sum of the number of domestic

M&A in target country i (Xii,t) and the number of cross-border M&A involving target country i and

acquirer j (Xij,t) (see Erel et al. (2012)), and is expressed in percentage terms. Hence, this dependent

variable measures the volume of cross-border M&A between a certain ordered country pair in year t,

where year t refers to a year in the time period 2004 to 2012. The fact that the country pairs are

ordered entails, for instance, that for any observation of the United Stated as target country i and

Argentina as acquirer country j, there is also an observation of Argentina as target country i and the

United States as acquirer country j.

(Cultural distance)

ij

refers to the cultural distance between target country i and acquirer country j. It

equals the value on the adjusted version of the Kogut and Singh (1988) index, shown in Appendix A,

and is based on all six of Hofstede’s (1980, 2010) dimensions. (Shareholder protection)j-i

refers to the

difference between the acquirer and target countries of domicile in the strength of shareholder

protection. Different measures of shareholder protection are used, and explained in more detail in

the next section. The country level and country pair control variables that are included in the

regressions are also described in Section 4.

16

4. Data sources

4.1. M&A data

For the tests of cross-border M&A volume, I start with all completed M&A from the Securities Data

Company (SDC) database from 2004 through 2012, in which 51% or more of the target company was

acquired. Public, private, as well as subsidiary acquirers and targets are included. SDC provides data

on the identity, nationality and industry classifications of the companies involved, the announcement

dates of the M&A, the method of payment, the deal attitude (friendly or hostile), the percentage of

shares acquired in and owned after the transaction, the transaction price (although this is reported

for only 38% of total M&A), and other deal-specific information.

The initial sample includes 202,655 M&A, of which 152,463 (i.e. 75.2%) are domestic and 50,192 (i.e.

24.8%) are cross-border.

Next, I exclude all M&A in which target and/or acquirer originate from countries with incomplete data

on Hofstede’s (2010) six dimensions and for which the measures of shareholder protection used in

this paper, which will be discussed in Section 4.3., are not available.

The final sample includes 193,617 M&A, of which 151,613 (i.e. 78.3%) are domestic and 42,004 (i.e.

21.7%) are cross-border. A detailed matrix of the number of M&A by country pair is presented in Table

A in Appendix B.

4.2. Empirical measures of cultural distance

To measure the cultural distance between two countries, I use the country scores on Hofstede’s (1980,

2010) six dimensions of national culture, which he provides on his personal website. Country scores

are available for 100 different countries, but for only 68 of them complete data on the first four

dimensions (i.e. PDI, IDV, MAS and UAI) is reported. There are 63 countries for which data on all six

dimensions is reported (i.e. including LTO and IVR). The Hofstede measures are static, which means

that they are time invariant. This poses the question of whether the scores on the first four

dimensions, which were established 24 years ago, are still valid when measuring national cultural

distance in a sample of cross-border M&A observed as recently as the one used in this paper. However,

Hofstede et al. (2010) state that the relative scores have been proven to be quite stable over time.

The forces that cause national cultures to shift tend to be global or continent-wide. Hence, if cultures

shift, they shift together. This means that the absolute country scores might not hold anymore, but

the difference in country scores between countries do. Consequently, according to Hofstede et al.

17

(2010), the country scores can still be used, but only to examine differences in national culture

between countries and not the national cultures of these countries separately.

The measure of cultural distance used in this paper is the adjusted Kogut and Singh (1988) index,

shown in Appendix A.

4.3. Empirical measures of shareholder protection

To measure the strength of shareholder protection in the countries in the sample, I collect data on

these countries’ scores on the revised anti-director rights index (DLLS, 2008), the anti-self-dealing

index (DLLS, 2008), the prospectus liability index (LLS, 2006), and the disclosure in the prospectus index

(LLS, 2006). I also obtain a measure of the countries’ quality of legal enforcement, by collecting data

on these countries’ ‘efficiency of the judicial system’ (LLS, 2006). The country-specific measures of

shareholder protection are then obtained by multiplying these countries’ efficiency of the judicial

system by their scores on aforementioned indices of shareholder protection. These measures are

shortly referred to as Revised Anti-Director Rights, the Anti-Self-Dealing Index, Prospectus Liability,

and Disclosure in the Prospectus, respectively. These measures of shareholder protection are similar

to the one used by Bris and Cabolis (2008), who multiply the original anti-director rights index (LLSV,

1998) by the efficiency of the judicial system, and to the one used by Rossi and Volpin (2004), who

multiply the original anti-director rights index by the value of rule of law.

To examine the effect of public enforcement on M&A volume, I obtain the countries’ scores on the

public enforcement index (DLLS, 2008). All of the aforementioned variables are obtained through the

personal website of prof. A. Shleifer. These measures of shareholder protection are static, like the

measure of national cultural distance. However, the measure of shareholder protection reported in

LLSV (1998) (the original anti-director rights index) is used in the majority of the recent literature in

this field (see e.g. Bris and Cabolis (2008)), which suggests that these measures are still appropriate to

examine the effect of shareholder protection on cross-border M&A, especially since the indices of

shareholder protection used in this paper were established more recently than the original

anti-director rights index. Indeed, one of the authors of the papers in which each of aforementioned

variables were constructed and reported (prof. F. Lopez-de-Silanes, 2014), confirms that the law tends

to remain quite stable over time. Aforementioned measures are therefore appropriate to use as

measures of shareholder protection in a sample of cross-border M&A observed in a time period like

the one used in this paper. The difference in shareholder protection between the acquirer and target

countries of domicile is obtained by subtracting the shareholder protection in the target country from

that in the acquirer country.

18

4.4. Other factors that affect M&A

As stated in the first section, factors other than cultural distance and cross-country differences in

shareholder protection have been shown to affect M&A volume. Since these might be correlated with

differences in shareholder protection and cultural distance, these factors are controlled for in the

regressions. This is necessary to isolate the effect of cultural distance and differences in shareholder

protection from country-level characteristics.

First, I obtain data on countries’ legal origins, corresponding to the paper of DLLS (2008), from the

website of prof. A. Shleifer. A country’s legal origin is recorded as English common law or French,

German or Scandinavian civil law. Countries with a common law system tend to have stronger

shareholder protection than civil law countries (see LLSV (1998), LLS (2006) or DLLS (2008)). Hence,

consistent with my hypothesis, I expect to find a larger (smaller) volume of M&A between an ordered

country pair that involves an acquirer (target) country that has a common law system.

Two components of national culture are language and religion. If my hypothesis is correct, sharing an

official language or a primary religion should be associated with a higher volume of cross-border M&A

between a certain country pair. Data on countries’ official languages is obtained from Centre

d'Etudes Prospectives et d'Informations Internationales (CEPII)). Data on primary religions is obtained

from Stulz and Williamson (2003).

I obtain data on annual GDP and GDP growth rates from the World Bank Development Indicators. I

also control for bilateral trade flows between a country pair. Bilateral imports (exports) equals the

value of imports (exports) by the target country from (to) the acquirer country as a percentage of total

imports (exports) by the target country. This definition follows from Erel et al. (2012). Bilateral trade

flows between a country pair is then defined as the maximum of bilateral imports and exports

between that country pair. All of the data necessary to construct this variable is obtained from the

United Nations Comtrade database.

Furthermore, cross-country differences in tax rates might affect M&A volume. Data on the countries’

average annual corporate income tax rates are obtained from the Organisation for Economic

Co-operation and Development (OECD), and from KPMG.

Geographic distance between two countries is likely to have a negative effect on cross-border M&A

volume between these countries. Data on geographic distance is from CEPII. I record exchange rate

growth and volatility between each country pair, using data on national exchange rates from the

Institutional Brokers' Estimate System (I/B/E/S) database. I also record whether two countries have

signed a double taxation treaty in a particular year. Data on double taxation treaties is obtained from

the United Nations Conference on Trade and Development (UNCTAD). Finally, I report whether a

country pair has ever been in a colonial relationship, using data from CEPII.

19

4.5. Summary statistics

Table I presents summary statistics of the variables used in the analysis. The primary religions and

languages of the countries in the sample are not used in the analysis, but I present their summary

statistics to provide an indication of the diversity of the countries in the sample. Panel A presents

country-level variables. The average value of Revised Anti-Director Rights across all countries is 27.17,

with a standard deviation of 12.10. The average values of the Anti-Self-Dealing Index, Prospectus

Liability, and Disclosure in the Prospectus equal 3.80, 3.70 and 4.70, with corresponding standard

deviations of 2.57, 2.43 and 2.45, respectively. The average score on the public enforcement index

across all countries is 0.47, with a standard deviation of 0.44.

Catholicism is the primary religion in 42% of the countries in the sample, followed by Protestantism at

25%, Islam at 10%, and Buddhism at 9%. 15% of the countries has another primary religion. The

primary language in 23% of the countries is English, followed by Spanish at 15%, German at 4% and

French at 3%. The primary language in 55% of the countries is a language other than English, Spanish,

French or German. The majority of the countries in the sample (45%) are French civil law countries.

English common law, German civil law and Scandinavian civil law countries comprise 30%, 18% and

7% of the sample, respectively. Finally, there is significant variation in GDP, GDP growth, and corporate

income tax rates over the countries in the sample.

Panel B of Table I presents summary statistics for the country pair variables. Note that these country

pairs are ordered country pairs. Across all ordered country pair-years, cross-border M&A volume is

very small. I find that cross-border M&A volume is zero at the 75

th

_{percentile of country pairs. The}

reason is that cross-border M&A volume is concentrated within certain country pairs, as is shown in

Table A in Appendix B. The average total M&A volume across all country pairs equals 0.71%, with a

standard deviation of 3.11%. The average volume of cross-border M&A involving public acquirers

equals 1.19%, with a standard deviation of 6.03%. The average volume of M&A involving private

acquirers is 0.43%, with a standard deviation of 2.14%.

Because the country pairs are ordered, the mean and median difference in shareholder protection

across all country pairs is 0. The standard deviations of the difference between the acquirer and target

countries in Revised Anti-Director Rights, Anti-Self-Dealing Index, Prospectus Liability, and Disclosure

in the Prospectus are equal to 17.30, 3.67, 3.47 and 3.50, respectively. The standard deviation of the

difference in the public enforcement index across all ordered country pairs equals 0.62.

The average level of cultural distance across all country pairs is 2.00, with a standard deviation of 1.14.

The average annual volume of bilateral trade across all country pairs equals 1.51%. 3% of the country

pairs share a border and 2% are in a colonial relationship. 24% of the country pairs share a primary

religion, and 10% share an official language.

20

Table I

Summary Statistics

This table presents the summary statistics for each variable. Observations are at the country level in Panel A, at the country

pair level in Panel B, and at the deal level in Panel C. The M&A include all public, private and subsidiary targets and

acquirers. The shareholder protection measures in Panels A and B are obtained by multiplying the efficiency of the

judiciary by the revised anti-director rights index, the anti-self-dealing index, the prospectus liability index, and the

disclosure in the prospectus index, respectively. All variables are defined in Appendix D. The target and acquirer countries

of domicile are listed in Table A in Appendix B.

Mean

Median

Standard

deviation

Min

Max

Panel A: Country level variables

Shareholder protection:

Revised Anti-Director Rights

27.17

28.50

12.10

6.50

50.00

Anti-Self-Dealing Index

3.80

2.94

2.57

0.47

10.00

Prospectus Liability

3.70

3.63

2.43

0.00

10.00

Disclosure in the Prospectus

4.70

4.52

2.45

0.00

10.00

Public Enforcement Index

0.47

0.50

0.44

0.00

1.00

Primary religion:

Protestant

0.25

0.00

0.43

0.00

1.00

Catholic

0.42

0.00

0.49

0.00

1.00

Buddhist

0.09

0.00

0.28

0.00

1.00

Muslim

0.10

0.00

0.31

0.00

1.00

Other

0.15

0.00

0.35

0.00

1.00

Primary language:

English

0.23

0.00

0.42

0.00

1.00

Spanish

0.15

0.00

0.36

0.00

1.00

French

0.03

0.00

0.16

0.00

1.00

German

0.04

0.00

0.19

0.00

1.00

Other

0.55

1.00

0.50

0.00

1.00

Legal origin:

English

0.30

0.00

0.46

0.00

1.00

German

0.18

0.00

0.39

0.00

1.00

French

0.45

0.00

0.50

0.00

1.00

Scandinavian

0.07

0.00

0.26

0.00

1.00

Gross domestic product ($billions)

704.62

183.48

1836.29

4.42

16244.60

GDP growth (%)

3.65

3.97

4.11

-17.96

18.29

Corporate Income tax rate (%)

26.43

27.50

7.12

10.00

39.54

Panel B: Country pair variables:

(M&A volume all acquirers)

ij,t

(%)

0.71

0.00

3.11

0.00

23.17

(M&A volume public acquirers)

ij,t

(%)

1.19

0.00

6.03

0.00

50.00

(M&A volume private acquirers)

ij,t

(%)

0.43

0.00

2.14

0.00

16.67

Shareholder protection:

(Revised Anti-Director Rights)

j-i

0.00

0.00

17.30

-43.50

43.50

(Anti-Self-Dealing Index)

j-i

0.00

0.00

3.67

-9.53

9.53

(Prospectus Liability)

j-i

0.00

0.00

3.47

-10.00

10.00

(Disclosure in the Prospectus)

j-i

0.00

0.00

3.50

-10.00

10.00

(Public Enforcement Index)

j-i

0.00

0.00

0.62

-1.00

1.00

Cultural distance

2.00

1.84

1.14

0.20

5.32

Exchange rate volatility

0.07

0.06

0.08

0.00

2.03

Exchange rate growth

0.11

0.00

1.52

-5.79

12.03

Imports from acquirer country (%)

1.18

0.16

3.24

0.00

62.11

Exports to acquirer country (%)

1.16

0.15

3.60

0.00

88.59

Max (Imports, Exports) (%)

1.51

0.26

4.02

0.00

88.59

Share border

0.03

0.00

0.17

0.00

1.00

21

Panel C of Table I presents summary statistics for deal-level characteristics for the 42,004 cross-border

M&A in the sample. The acquirer companies are on average much larger in terms of market value than

the target companies. Furthermore, the fraction of public acquirers in the sample of cross-border M&A

is much larger than the fraction of public targets. Finally, in the majority of M&A, 100% of the target

firm’s shares was acquired in the transaction.

5. Results

In this section, I present empirical evidence on the effects of cultural distance and shareholder

protection on M&A volume. The dependent variable, M&A volume

ij,t

, measures the percentage of

cross-border M&A between a certain ordered country pair in year t, where year t refers to a year in

the time period 2004 to 2012. The numerator of this measure equals the number of cross-border M&A

in year t (Xij,t) between target country i and acquirer country j (where i ≠ j). The denominator equals

the sum of the number of domestic M&A in target country i (Xii,t) and the number of cross-border M&A

involving target country i and acquirer j (Xij,t). This fraction (i.e. Xij,t/(Xij,t+ Xii,t)) is multiplied by 100 to

obtain the percentage of cross-border M&A to total M&A for a particular ordered country pair in year

t. Recall that the fact that the country pairs are ordered entails, for instance, that for any observation

Geographic distance x 1000 (km)

7.36

7.56

4.75

0.06

19.77

Same religion

0.24

0.00

0.42

0.00

1.00

Same language

0.10

0.00

0.30

0.00

1.00

Double taxation treaty

0.48

0.00

0.50

0.00

1.00

Panel C: Deal level variables

Shareholder protection:

(Gross domestic product)

j-i

($trillions)

0.91

0.23

2.12

-7.84

7.68

(Corporate tax rate)

j-i

(%)

0.67

0.40

8.99

-27.04

27.04

Transaction value ($billions)

0.26

0.03

1.03

0.00

39.46

Acquirer market value ($billions)

10.20

1.67

57.60

0.00

5110.00

Target market value ($billions)

2.99

0.21

43.10

0.00

1100.00

Method of payment:

Cash

0.21

0.00

0.41

0.00

1.00

Shares

0.05

0.00

0.21

0.00

1.00

Hybrid

0.03

0.00

0.17

0.00

1.00

Other

0.71

1.00

0.45

0.00

1.00

Tender offer

0.02

0.00

0.13

0.00

1.00

Friendly offer

0.97

1.00

0.16

0.00

1.00

Same industry

0.51

1.00

0.50

0.00

1.00

Termination agreement

0.02

0.00

0.13

0.00

1.00

Private target

0.95

1.00

0.23

0.00

1.00

Public target

0.06

0.00

0.23

0.00

1.00

Private acquirer

0.50

0.00

0.50

0.00

1.00

Public acquirer

0.50

1.00

0.50

0.00

1.00

Shares acquired in transaction (%)

95.84

100.00

11.73

51.00

100.00