Issues in Valuing Cross-Border M&A

The objective of this master's thesis is to point out differences in theoretical concepts of value drivers in cross-border M&A between international management and corporate finance and to suggest ways of accounting for these effects in the valuation process. In its theoretical part, the thesis provides a review of key concepts in M&A, corporate strategy, international management and valuation methods in order to identify the specific costs and benefits of cross-border business, recognize valuation methods suitable for valuing these effects and analyze whether they are already incorporated in them. The analytical part considers the effects not currently recognized in the valuation, analyzes their impact on transaction value and suggests ways of including them in DCF or real option valuation. The proposed approach to cross-border valuation is then applied to a real-life case study. The case study shows that incorporating cross-border effects leads to significantly different valuation estimates.