International Taxation and Takeover Premiums in Cross-border M&As

Huizinga, Harry, Voget, Johannes and Wagner, Wolf (2008) International Taxation and Takeover Premiums in Cross-border M&As. Centre for Business Taxation WP 08/26.

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Cross-border M&As can trigger a higher international taxation of the target’s income. Non-resident dividend withholding taxes may be imposed by the target country, while additional corporate income taxation can be imposed by the acquiring country. Our evidence suggests that takeover premiums fully reflect non-resident dividend withholding taxes, while there is some evidence that they reflect corporate income taxation by the acquiring country as well. In contrast, acquiring firm stock market returns around the bid announcement do not appear to reflect either type of taxation. These results are consistent with previous findings that the gains of M&As primarily accrue to target shareholders.

Item Type: Other Working Paper
Keywords: international taxation, takeover premiums
Centre: Oxford University Centre for Business Taxation > CBT Working Papers
Date Deposited: 24 May 2012 08:30
Last Modified: 15 Oct 2015 02:18

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