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Explaining M&A Success in European Banks

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  • Patrick Beitel
  • Dirk Schiereck
  • Mark Wahrenburg
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    Abstract

    "We study 98 large M&As of European bidding banks from 1985 to 2000 in order to investigate drivers of excess returns to the shareholders of the targets, the bidders, and to the combined entity of the bidder and the target. Our findings show that many of 13 drivers identified mostly from prior, US-focused research have significant explanatory power, indicating that the stock market reaction to M&A announcements of European bidding banks can be at least partly forecast. Our results are largely consistent with the US-experience and confirm the preference of stock markets for focused transactions and against diversification. Moreover, we find that less active bidders create more value than more active/experienced bidders. This stands in contrast to some US research and may indicate that managers of frequent European bidding banks may be motivated by other objectives than creating shareholder value." Copyright Blackwell Publishers Ltd, 2004.

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    Bibliographic Info

    Article provided by European Financial Management Association in its journal European Financial Management.

    Volume (Year): 10 (2004)
    Issue (Month): 1 ()
    Pages: 109-139

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    Handle: RePEc:bla:eufman:v:10:y:2004:i:1:p:109-139

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    Cited by:
    1. Beltratti, Andrea & Paladino, Giovanna, 2013. "Is M&A different during a crisis? Evidence from the European banking sector," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5394-5405.
    2. Díaz Díaz, Belén & Sanfilippo Azofra, Sergio & López Gutiérrez, Carlos, 2013. "Synergies or overpayment in European corporate M&A," MPRA Paper 51070, University Library of Munich, Germany.
    3. Lulu Gu & W. Robert Reed, 2012. "Information Asymmetry, Market Segmentation and Cross-Listing: Implicatons for Event Study Methodology," Working Papers in Economics 12/08, University of Canterbury, Department of Economics and Finance.
    4. Gregory, Alan & O'Donohoe, Sheila, 2014. "Do cross border and domestic acquisitions differ? Evidence from the acquisition of UK targets," International Review of Financial Analysis, Elsevier, vol. 31(C), pages 61-69.

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