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What twenty years of regulations have to say about M&As of U.S. banks?

Author

Listed:
  • Leledakis, George
  • Mamatzakis, Emmanuel
  • Pirgiotakis, Manos
  • Travlos, Nikolaos

Abstract

We extend the U.S. bank M&As literature by examining announcement returns for acquisitions of both listed and unlisted targets by U.S. banking firms for a long period of time from the eighties till to date. Over these decades there have been implemented several regulation changes, notably the Dodd-Frank Act that would be of interest to examine whether they have any impact, and if indeed they have to which direction, on value creation in M&As in the U.S. banking industry. Contrary to the conventional wisdom that bidding banks lose upon the announcement of a merger, we find positive abnormal returns for these firms that choose to acquire privately-held targets. Further, returns for acquirers in private offers do not depend on the method of payment, legislative changes, size, or geographical scope. However, we find that the use of a financial advisor on the part of the bidder can better explain the variation in abnormal returns for such offers. Our results are not influenced by any unobserved bidder-specific component or sample selection issues.

Suggested Citation

  • Leledakis, George & Mamatzakis, Emmanuel & Pirgiotakis, Manos & Travlos, Nikolaos, 2017. "What twenty years of regulations have to say about M&As of U.S. banks?," MPRA Paper 82977, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:82977
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    File URL: https://mpra.ub.uni-muenchen.de/82977/1/MPRA_paper_82977.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Mergers and Acquisitions; Regulations; Banks; Value Creation;

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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