Resumen de Diversification in M&As, Decision and shareholders' valuation
Isabel Feito-Ruiz, Susana Menéndez Requejo 
The aim of this paper is to analyze the diversification decision in Mergers and Acquisitions (M&As) and how this decision is valued by acquiring shareholders, considering the influence of the legal and institutional environment. Using a sample of 447 M&As announced by European firms, which acquire a target in any country in the world over the period 2002�2007, we find that the weak legal and institutional environment in the bidder country has a positive impact on the diversification decision. After controlling the diversification endogeneity, we observe that acquiring shareholders value diversified M&As negatively in countries with strong legal and institutional environment. This result indicates that the benefits of the internal capital market effect dominate the agency conflicts� effect. We also observe that acquiring firms with concentrated ownership structures value diversified M&As negatively in countries with strong legal and institutional environment.
