Government Asset Sales , Economic Nationalism , and Acquirer Performance

We investigate acquirer returns using a comprehensive sample of government asset sale announcements in 123 countries around the world in 1984-2009. Overall, we find positive abnormal returns to acquirers of state-owned assets. Returns are greater when the acquirer is domestic, when the sale occurs in a developing nation, and when the acquirer itself is not a former stateowned enterprise. Buyers of bailed-out firms exhibit average abnormal returns of 3.16%, compared to 0.70% for all other government sales. Our results suggest that the market favors acquirers that benefit from divesting governments driven by economic nationalism rather than sale revenue maximization.