This study examines the effect of using toeholds in domestic and cross-border acquisitionprocesses on the bidder’s acquisition performance. The sample constitutes 1,701 acquisitionsof European listed firms over the period 2003-2016. Results reveal significant evidence of anadverse effect of toeholds on the bidder’s acquisition performance. However, in cross-borderacquisitions, the use of toeholds results on average in significantly higher abnormal returns.Finally, the use of toeholds is found to be more efficient in target countries with a civil-lawsystem compared to countries with a common-law system. Overall, these findings increase ourunderstanding of management actions about the application of toeholds as an acquisitionstrategy.