We examine the impact of the international diversification by banks on the value of their advice provided in cross-border merger and acquisition transactions by studying bidder returns and deal performance following 1,708 cross-border M&A deals. We find that bidders engaging a more internationally diversified financial advisor face lower stock price and synergy returns, worse deal operating performance, and slower deal completion. We show that these negative effects of diversification can be mitigated by involvement in financing or country-specific available capacity of the advisor. [version: December 2013]

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Discussion paper Center for Economic Research
Erasmus Research Institute of Management

de Jong, A., Ongena, S., & van der Poel, M. (2010). The international diversification of banks and the value of their cross-border M&A advice. Discussion paper Center for Economic Research (Vol. 2010–24, pp. 1–51). Retrieved from http://hdl.handle.net/1765/31621