The rise of globalization has exponentially increased the market for cross border M&A. In 1997 alone there were over 2333 cross border transactions worth a total of approximately $298 billion. This rapid increase has taken many M&A firms by surprise because the majority of them never had to consider acquiring Due to the complicated nature of cross border M&A, the vast majority of cross border actions have unsuccessful anies seek to expand their global footprint and become more agile at creating high-performing businesses and cultures across national boundaries.
In a study conducted in 2000 by Lehman Brothers, it was found that, on average, large M&A deals cause the domestic currency of the target corporation to appreciate by 1% relative to the acquirers.
Even mergers of companies with headquarters in the same country are very much of this type (cross-border Mergers). After all,when Boeing acquires McDonnell Douglas, the two American companies must integrate operations in dozens of countries around the world. This is just as true for other supposedly “single country” mergers, such as the $29 billion dollar merger of Swiss drug makers Sandoz and Ciba-Geigy (now Novartis).