Cross-Border Bank Mergers: What Lures the Rare Animal?

Abstract

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Mergers and Acquisitions of Financial Institutions: A Review of the Post-2000 Literature

“…10 A large related literature examines the determinants of cross-border banking, which is usually accomplished via acquisition. Generally, these studies have found that large efficient banks (from developed financial systems) are more likely to be engaged in overseas expansion (Berger et al 2000;Pozzolo 2001a, 2001b;Buch and DeLong 2004;Berger 2007;Havrylchyk and Jurzyk 2007;Buch and DeLong 2003;Hernando et al 2009;Correa 2009). The reasons for bank and insurance firm expansion within Europe appear to be similar (Pozzolo and Focarelli 2007).…”

European banking: An overview

“…Event studies suggest announcements of cross-border acquisitions tend to produce negative stock price reactions on average (Cybo-Ottone and Murgia, 2000;Beitel and Schiereck, 2001). However, studies of post-merger performance have produced mixed results (Vander Vennet, 1996Buch and De Long, 2004). Altunbas and Marques Ibanez (2004) report that cross-border mergers between banks with similar objectives resulted in enhanced performance.…”

Obstacles to a global banking system: “Old Europe” versus “New Europe”

“…(e.g., Buch, 2003;Berger et al, 2004a;Buch and DeLong, 2004). Note that the diseconomies based on differences between home and host nation may be more severe for foreign institutions from developed nations operating in developing nations.…”