Cross-Border Bank Mergers: Who Gains and Why?

This study examines the short-term and long-term wealth effects of 96 cross-border bank mergers between 1985 and 2005. In the short-term, even after a thorough accounting for information leakage, transactions are found to be wealth-creating, albeit only on a net basis with target gains more than compensating for bidder losses. Contrary to earlier evidence, no abnormal long-term returns are detected, which supports the validity of the inferences drawn from the short-term. Furthermore, a thorough analysis of factors that can explain wealth creation ex-ante suggests that bidder and net wealth creation is higher if bidders take over targets that are already relatively cost efficient ex-ante and do not acquire in «hot» deal markets.

Autorentext

The Author: Dirk Schmautzer was born in 1976 in Moers (Germany). From 1997 to 2002, he studied Business Administration with a focus on Finance, Banking and Statistics at the University of Cologne and the Stockholm School of Economics (Sweden). After receiving his Master's degree, he joined an international strategy consultancy. Between 2005 and 2007, he performed his doctoral studies at the University of Münster.

Inhalt

Contents: The Market for Cross-Border Bank M&A - Theoretical Foundations of Banking and M&A - Previous Empirical Evidence on Wealth Effects of Cross-Border Bank M&A - Design of Analysis - New Empirical Evidence on Wealth Effects of Cross-Border Bank M&A.