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The effect of ex post risks on post-M&A performance efficiency

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  • Dzhagityan, Eduard

Abstract

This article undertakes an empirical analysis of M&A-related risks based on evidence from eight listed U.S. bank holding companies over the period 2000-10. The research model is designed as an inter-domain risk matrix encompassing idiosyncratic and systematic risks underlying horizontal and conglomerate M&A. Risk impact is measured by critical performance metrics at corporate and environmental levels in the pre- and post-M&A periods. It was found insignificant relationship between synergy and concentration and marginal priority of financial over operating synergy in the post-M&A realm. While systematic risk can be mitigated by horizontal M&A followed by majority ownership, its adverse effect is insurmountable for institutions resulted from conglomerate M&A.

Suggested Citation

  • Dzhagityan, Eduard, 2012. "The effect of ex post risks on post-M&A performance efficiency," MPRA Paper 63147, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63147
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    More about this item

    Keywords

    Mergers and acquisitions (M&A); U.S. banking industry; Idiosyncratic risk; Systematic risk; Synergy; Concentration; M&A paradigm shift;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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