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]

Additional Metadata
Keywords Advisor Choice, Bank Diversification, Cross-Border Mergers and Acquisitions
JEL Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies (jel G24), Mergers; Acquisitions; Restructuring; Corporate Governance (jel G34)
Persistent URL hdl.handle.net/1765/31621
Journal Discussion paper Center for Economic Research
Note European Banking Center Discussion Paper No. 2010-03
de Jong, A, Ongena, S, & van der Poel, A.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