IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v6y1999i1p5-11.html
   My bibliography  Save this article

The wealth effects of bank acquisitions

Author

Listed:
  • Arphaphan Chavaltanpipat
  • Shady Kholdy
  • Ahmad Sohrabian

Abstract

The purpose of the study is to investigate whether trends in banking mergers between January 1994 and October 1995 are different from previous periods. Specifically, the study focused on greatly increased acquisition prices and interstate consolidations. Abnormal returns and cumulative abnormal returns for a sample of 30 mergers were determined for each situation. The results of the study showed negative effects for shareholders of acquiring banks around the announcement period. Medium-to-small acquisitions, under $1 billion, caused insignificant negative abnormal returns, but large acquisitions, over $1 billion, caused significant negative abnormal returns. At the same time, shareholders in acquired banks of both sizes earned significant positive abnormal returns. The most dramatic discovery was that the larger acquisition price, the higher the target returns. The analysis of interstate mergers showed similar results. The analysis documented significant positive abnormal returns for target banks and insignificant negative abnormal returns for acquiring banks during the announcement.

Suggested Citation

  • Arphaphan Chavaltanpipat & Shady Kholdy & Ahmad Sohrabian, 1999. "The wealth effects of bank acquisitions," Applied Economics Letters, Taylor & Francis Journals, vol. 6(1), pages 5-11.
    • Handle: RePEc:taf:apeclt:v:6:y:1999:i:1:p:5-11
    DOI: 10.1080/135048599353780
    as

    Download full text from publisher

    File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/135048599353780&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/135048599353780?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ahmed Mohamed Badreldin & Christian Kalhoefer, 2009. "The Effect of Mergers and Acquisitions on Bank Performance in Egypt," Working Papers 18, The German University in Cairo, Faculty of Management Technology.
    2. Rao, Ullas & Mishra, Tapas, 2020. "Posterior analysis of mergers and acquisitions in the international financial market: A re-appraisal," Research in International Business and Finance, Elsevier, vol. 51(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:6:y:1999:i:1:p:5-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.