Working Paper No. 1057

Cross-Border Acquisitions and Restructuring: Multinational Enterprises versus Private Equity-Firms

Published: January 28, 2015Pages: 30Keywords: Cross-border; International Restructuring; Ownership Efficiency; Private Equity; M&AsJEL-codes: F23; F65; L13

Cross-Border Acquisitions and Restructuring: Multinational Enterprises versus Private Equity-Firms Selva Baziki, Pehr-Johan Norbäck, Lars Persson and Joacim Tåg

An increasingly large share of cross-border acquisitions are undertaken by private equity-firms (PE-firms) and not by traditional multinational enterprises (MNEs). We propose a model of cross-border acquisitions in which MNEs and PE-firms compete over domestic assets. MNEs' advantage lies in firm-specific synergies and retained earnings, whereas PE-firms are good at reorganizing target firms.

Prevailing interest rates do not work in favor of PE-firms, but a lower risk premium and a better financial market development does. Stronger firm-specific synergies, however, favors MNEs. Performing a welfare analysis, we show that a policy of restricting PE-firms from buying domestic assets can be counterproductive.

Pehr-Johan Norbäck


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Lars Persson


Ph: +46 8 665 4504

Joacim Tåg


Ph: +46 8 665 4524

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

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In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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