Wednesday, February 24, 2010
Overseas Acquisitions and the Impact of National Pride
In the context the proposed overseas acquisitions by Reliance Industries (of LyondellBasell Industries) and Bharti Airtel (of Zain), the M&A Law Prof Blawg has a interesting take on the impact of national pride generated through press attention on such deals. The Blog refers to a recent paper The Cost of Pride: Why Do Firms from Developing Countries Bid Higher?, which concludes that “firms from developing countries (versus those from developed countries) bid higher on average to acquire assets in developed countries”. The study finds correlation between the high prices of bids and the presence of “national pride” characteristics displayed by transactions.