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Determinants of domestic and cross-border bank acquisitions in the European Union

  • Ignacio Hernando
  • María J. Nieto
  • Larry D. Wall

This paper analyzes the determinants of bank acquisitions both within and across 25 members of the European Union (EU-25) during the period 1997–2004. Our results suggest that poorly managed banks (those with a high cost-to-income ratio) and larger banks are more likely to be acquired by other banks in the same country. The probability of being a target in a cross-border deal is larger for banks that are quoted in the stock market. Finally, banks operating in more concentrated markets are less likely to be acquired by other banks in the same country but are more likely to be acquired by banks in other EU-25 countries.

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Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2008-26.

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Date of creation: 2008
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Handle: RePEc:fip:fedawp:2008-26
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  1. John K. Ashton & Khac Pham, 2007. "Efficiency and Price Effects of Horizontal Bank Mergers," Working Papers 07-9, Centre for Competition Policy, University of East Anglia.
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  8. Knapp, Morris & Gart, Alan & Chaudhry, Mukesh, 2006. "The impact of mean reversion of bank profitability on post-merger performance in the banking industry," Journal of Banking & Finance, Elsevier, vol. 30(12), pages 3503-3517, December.
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  17. Cheng, David C & Gup, Benton E & Wall, Larry D, 1989. "Financial Determinants of Bank Takeovers: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(4), pages 524-36, November.
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