This paper examines the effect on the market valuation of large Dutch companies following the announcements of international strategic alliances during the period 1985-1992. The effects are distinguished by type of alliance and country of origin of the partnering firms. While international strategic alliances are generally found to have a positive effect on a company's market value, strategically and culturally distant foreign partners generate a strong negative effect. The results underscore the importance of conducting a strategic, operational and cultural audit of the partnering companies and the envisaged partnership. The audit needs to be taken as a starting point in developing the essential co-operation skills to make the alliance work and should become integrated within a comprehensive performance scorecard. (C) 2003 Elsevier Ltd. All rights reserved.