1、 中文1868字，1000单词，6000英文字符 1 外文翻译 原文 Mitigating risks in cross-border acquisitions In the past 20 years, the volume of cross-border acquisitions for corporate assets has increased nearly three times faster than the volume of domestic acquisitions. Compared to domestic acquisit
2、ions, cross-border acquisitions present greater challenges for a buyer because of institutions and cultural values that are unfamiliar to a foreign corporation. Firms acquiring assets in a foreign country may face different accounting practices and disclosure requirements, which hamper the due dilig
3、ence process. The internalization of assets into the buyer operational structure is further complicated by cultural peculiarities that determine how strategies are formulated and business is conducted. Acquiring firms may also encounter legal systems with different protection of property rights, a f
4、actor that adds uncertainty to future cash flows. The greater level of uncertainty in cross-border acquisitions reduces the value of the assets being exchanged (Akerlof 1970； Stiglitz, 2000) and appears as an explanation to the poor performance of acquirers in cross-border acquisitions (Denis et al.
5、, 2002； Moeller and Schlingemann, 2005). In this article, I will analyze different alternatives in which buyers can ameliorate the risks inherent in these transactions. This analysis is important for understanding the optimal entry strategies for firms that want to expand their operations in foreign
6、 markets. Acquiring firms can reduce investment uncertainty by structuring the payments so they are contingent on performance of the assets. This paper analyzes two alternative contingent payments.First, buyers can pay with stock, sharing the risk of the acquisition with the sellers as they wi
7、ll retain an equity position in the acquirer. Second, acquiring firms can use earn out payments contingent on the performance of the assets being acquired (Kohers and Ang, 2000). Buyers and sellers can operate assets together in an equity joint venture (JV) to improve the exchange of information on
8、the quality of the assets. Nanda and Williamson (1995) describe several JVs that were conceived as a mechanism to exchange information conducive to an eventual acquisition. In a sample of predominantly domestic JVs, Mantecon and Chatfield (2007) find that JVs can be mechanisms to transfer assets in
9、the presence of valuation uncertainty. The purpose of this article is to understand which of these mechanisms for reducing 2 uncertainty is more beneficial to acquirers of cross-border corporate assets. I hypothesize that the use of earnouts and stock as a method of payment and the forma
10、tion of equity JVs conducive to acquisitions should be more valuable when investment uncertainty is more severe. This article contributes to the existing literature by testing this hypothesis in a sample of 30,783 acquisitions announced from 1985 to 2005. This sample involved buyers from 75 nations
11、engaged in 6824 cross border-acquisitions of assets located in 128 countries. The results show that the valuation effects to acquirers in cross-border deals depend on the information obtained about the assets before the acquisition. Buyers experienced large gains in the acquisition of assets that we
12、re operated in a JV, suggesting that acquirers profited from the information obtained while jointly operating the assets. I hypothesize that these gains should be positively associated with the degree of uncertainty being resolved. Consistent with this hypothesis, acquirers experienced larger gains
13、in the acquisitions of JVs located in countries with higher levels of investment risk and in the presence of higher levels of valuation uncertainty.These results suggest that JVs can be used as a transitional mechanism to reduce the uncertainty associated with cross-border acquisitions in the presen
14、ce of severe valuation uncertainties and country investment risks. Mechanisms to ameliorate investment risk in cross-border acquisitions.Although the evidence on the valuation effects to acquirers of cross-border acquisitions remains inconclusive, these buyers face higher levels of uncertainty
15、 for several reasons. The due diligence process is complicated by different accounting and disclosure requirements. Assimilation of assets is also more difficult because of cultural differences that determine how business is conducted. In addition, legal systems with different levels for protection
16、of minority shareholders and enforceability of contracts increase the difficulty to value future cash flows. How can buyers reduce the uncertainty associated with crossborder acquisitions? Reuer (2005) suggests the use of contingent payments and operational relationships. The use of stock as currenc
17、y can be a contractual tool to reduce investment risk because it has a contingent-pricing effect (Hansen, 1987). The target firm, accepting stock, signals positive information on the value of the acquirer and on the assets being transferred. Buyers in turn signal their own quality as they prefer to
18、use their stock when it is overvalued (Myers and Majluf, 1984). Thus, the final market reaction to announcements of using stock in acquisitions depends on the level of asymmetric 3 information about the buyer and the target as well as their relative bargaining position. Acquiring
19、firms can also reduce uncertainty by using earnout payments. Reuer et al. (2004) find that US firms use more contingent payouts when purchasing assets in high-tech and services industries for a sample of 3098 deals in the period 19951998. Kohers and Ang (2000) analyze 938 mergers with earnout paymen
20、ts. They report that earnouts facilitate the transactions in the presence of high information asymmetries. Buyers face higher levels of uncertainty in cross-border acquisitions. This article contributes to the extant literature by analyzing different mechanisms buyers can use to reduce investment un
21、certainty in a large sample of cross-border acquisitions of assets located in 128 countries. The results from this analysis indicate that buyers experienced lower gains when the assets were located in a different country. The findings suggest that these inferior gains can be explained by more severe
22、 agency problems in buyers involved in cross-border acquisitions. The results indicate that acquiring firms experienced larger gains in the acquisition of assets that were jointly operated in a JV. These larger gains to acquirers can not be explained by the listing effect, by the presence of call op
23、tions embedded in JV contracts, or by expropriation of minority shareholders of target firms. The findings show that earnout payments were associated with larger gains to acquirers of domestic assets, but there is no indication that buyers benefited from these strategies in cross-border acquisitions
24、. The results suggest that the exchange of information that occurs in a JV enhances acquirer value in cross-border transactions in presence of higher levels of valuation uncertainty and country investment risk. Thus, JVs appear to be a valuable mechanism for reducing the risks inherent in cross-border acquisitions. Author: Tomas Mantecon Nationality: Amarica Originate form: Journal of Banking & Finance,2009(33),640-641,650.
