Analysis of cross-border and domestic mega-M&As of European commercial banks

被引:8
作者
Nnadi, Matthias [1 ]
Tanna, Sailesh [1 ]
机构
[1] Coventry Univ, Dept Econ Finance & Accounting, Coventry, W Midlands, England
关键词
European Union; Banking; Megamergers; Domestic; Cross border; Standardized abnormal returns; Acquisitions and mergers; PERFORMANCE; MERGERS; WEALTH; GAINS;
D O I
10.1108/MF-01-2010-0006
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Purpose - This paper aims to examine value gains to acquirers in large commercial bank mega-mergers (with transaction values over 1 pound billion) that occurred in the European Union during the period 1997-2007, distinguishing between domestic and cross-border transactions. Design/methodology/approach - Based on a sample of 62 bank mega-mergers, an event study methodology is employed using a market model to determine cumulative standardised abnormal returns (CSAR) to acquiring banks around the announcement date of merger deals. This is followed by cross-sectional regression to determine specific characteristics driving acquirers' CSAR. Findings - Cross-border bank mergers have been more frequent in recent years, reflecting a growing trend of banking sector consolidation in the EU. However, such mergers are found to yield significant negative announcement period acquirer returns, while domestic deals have marginally negative but insignificant returns. The operational cost efficiency and capital strength of acquiring banks are found to be significant in influencing excess returns. Research limitations/implications - Constraints on data availability limited the scope for sensitivity analysis and incorporation of target characteristics in the cross-sectional regression of drivers affecting acquirers' CSAR. Further research is aimed to address these issues. Practical implications - Event study and regression results indicate that potential downside risks are judged by market participants to outweigh the benefits from cross-border M&As in the retail banking market despite evidence of increased financial sector consolidation in the EU. Originality/value - The study reflects the recent period of increased cross-border banking consolidation in the EU and reveals findings that differ in some respects from previous studies on EU bank M&As.
引用
收藏
页码:848 / 862
页数:15
相关论文
共 32 条
[1]   The effects of megamergers on efficiency and prices: Evidence from a bank profit function [J].
Akhavein, JD ;
Berger, AN ;
Humphrey, DB .
REVIEW OF INDUSTRIAL ORGANIZATION, 1997, 12 (01) :95-139
[2]   The effects of cross-border bank mergers on bank risk and value [J].
Amihud, Y ;
DeLong, GL ;
Saunders, A .
JOURNAL OF INTERNATIONAL MONEY AND FINANCE, 2002, 21 (06) :857-877
[3]   New evidence and perspectives on mergers [J].
Andrade, G ;
Mitchell, M ;
Stafford, E .
JOURNAL OF ECONOMIC PERSPECTIVES, 2001, 15 (02) :103-120
[4]  
[Anonymous], 2004, APPL FINANCIAL EC
[5]  
[Anonymous], 2004, RES INT BUS FINANC
[6]  
[Anonymous], CROSS BORD CONS EU F
[7]  
Beitel P., 2004, EUR FINANC MANAG, V10, P109, DOI [DOI 10.1111/J.1468-036X.2004.00242.X, 10.1111/j.1468-036X.2004.00242.x]
[8]  
Berger A., 2000, BROOKINGS WHARTON PA, V2, P123
[9]   Do weak supervisory systems encourage bank risk-taking? [J].
Buch, Claudia M. ;
DeLong, Gayle .
JOURNAL OF FINANCIAL STABILITY, 2008, 4 (01) :23-39
[10]  
Campa JoseManuel., 2004, European Financial Management, V10, P47, DOI 10.1111/j.1468-036X.2004.00240.x