Cross-border LBOs

- We examine the effect of creditor rights on cross-border LBOs.
- Cross-border LBOs are more common from strong to weak creditor rights countries.
- Cross-border LBOs offer higher premiums in countries with weak creditor rights.
- PE firms form club deals in cross-border LBOs in countries with weak creditor rights.

We examine cross-border private equity (PE) sponsored leveraged buyout (LBO) transactions in 43 countries in relation to creditor rights and other legal and institutional variables. Cross-border LBO investment is more common from strong creditor rights countries to weak creditor rights countries. Club deals are less common in countries with stronger creditor rights, and less common in cross-border LBOs. Premiums are lower in countries with stronger creditor rights, and among cross-border deals.