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International audience ; This paper investigates the effects of horizontal acquisitions on the performance of target firms in the 1990's. Using French manufacturing firm-level data, we examine two main indicators of performance: the profit and the productive efficiency. We distinguish domestic from cross-border acquisitions. To evaluate the impact of take-overs, we implement appropriate difference-in-difference estimation techniques associated to a matching propensity score procedure. We find that M&A do not increase the profit of French target firms, even on the long run. However, they clearly raise the productivity of target firms. These results suggest that firms probably redistribute efficiency gains at the upstream and/or downstream production stage. There is no evidence of an increase in market power. In addition, the consequences of domestic and cross-border M&A significantly differ. Efficiency gains are stronger for cross-border M&A. This conclusion is however true only for extra-European Union operations. The achievement in the European economic integration certainly explains the absence of difference between European and domestic acquisitions. Finally, our results cast some doubt on the frequent discrimination attitude towards foreign takeovers and the fears of their impact on firms' performance and the host country's welfare.

This paper investigates the effects of horizontal acquisitions on
the performance of target firms in the 1990's. Using French
manufacturing firm-level data, we examine two main indicators of
performance: the profit and the productive efficiency. We
distinguish domestic from cross-border acquisitions. To evaluate the
impact of take-overs, we implement appropriate
difference-in-difference estimation techniques associated to a
matching propensity score procedure. We find that M&A do not
increase the profit of French target firms, even on the long run.
However, they clearly raise the productivity of target firms. These
results suggest that firms probably redistribute efficiency gains at
the upstream and/or downstream production stage. There is no
evidence of an increase in market power. In addition, the
consequences of domestic and cross-border M&A significantly differ.
Efficiency gains are stronger for cross-border M&A. This conclusion
is however true only for extra-European Union operations. The
achievement in the European economic integration certainly explains
the absence of difference between European and domestic
acquisitions. Finally, our results cast some doubt on the frequent
discrimination attitude towards foreign takeovers and the fears of
their impact on firms' performance and the host country's welfare.