Mergers and shareholder wealth in European banking

Cybo-Ottone, Alberto; Murgia, Maurizio

doi:10.1016/s0378-4266(99)00109-0

Cited by 293 publications

(152 citation statements)

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“…These results indicate a wealth loss for the shareholders of the acquiring firms around the announcements of takeovers, suggesting that takeovers by financial institutions are significantly value destructive. These findings are in line with those of previous studies (e.g., Franks et al, 1991;Becher, 2000;Cybo-Ottone & Murgia, 2000). This underperformance may be justified by managerial hubris, leading acquirers to overestimate the takeover gains (Roll, 1986).…”

Section: Copyright By Author(s); Cc-by 1257supporting

confidence: 92%

Short- And Long-Term Wealth Gains From UK Takeovers: The Case Of The Financial Industry

Boubaker

Hamza

2014

JABR

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Section: Copyright By Author(s); Cc-by 1257supporting

confidence: 92%

Short- And Long-Term Wealth Gains From UK Takeovers: The Case Of The Financial Industry

Boubaker

Hamza

2014

JABR

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“…Campa and Hernando, 2006, Ismail and Davidson, 2005, Lepetit et al, 2004, Altunbas and Ibanez, 2004, Beitel et al, 2004, Beitel and Schiereck, 2001, Cybo-Ottone and Murgia, 2000. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Thomson Financial Securities Data Company.…”

Section: Introductionmentioning

confidence: 99%

Revisiting the merger and acquisition performance of European banks

Asimakopoulos¹,

Athanasoglou²

2013

International Review of Financial Analysis

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The study examines the value creation of Merger and Acquisition (M&A) deals in European Banking from 1990Banking from -2004. This is performed, first, by examining the stock price reaction of banks to the announcement of M&A deals and, second, by analysing the determinants of this reaction. The findings provide evidence of value creation in European banks as the shareholders of the targets have benefited from positive and (statistically) significant abnormal returns while those of the acquirers earn small negative but non-significant abnormal returns. In the case of the shareholders of the acquirers, domestic M&As and especially those between banks with shares listed on the stock market, seem to be more beneficial compared to cross-border ones or those when the target is unlisted. Shareholders of the targets earn in all cases positive abnormal returns. Finally, although the link between abnormal returns and fundamental characteristics of the banks is rather weak, it appears that the acquisition of smaller, less efficient banks generating more diversified income are more value creating, while acquisition of less efficient, liquid and characterised by higher credit risk banks is not a value creating option.

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“…33 Barth, Brumbaugh, and Wilcox (2000) make a technological case for economies of scope, and Berger, De Young, Genay, and Udell (2000) identify some potential economies in universal banks. However, Allen and Rai (1996) and Vennet (1999) find only limited evidence of scope economies in European universal banks, although Cyberto-Ottone and Murgia (2000) show that scope expansion can raise shareholder wealth.…”

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Corporate Governance and Banks: What Have We Learned from the Financial Crisis?

Mehran¹,

2011

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractRecent academic work and policy analysis give insight into the governance problems exposed by the financial crisis and suggest possible solutions. We begin this paper by explaining why governance of banks differs from governance of nonfinancial firms. We then look at four areas of governance: executive compensation, boards, risk management, and market discipline. We discuss promising solutions and areas where further research is needed.

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Mergers and shareholder wealth in European banking

Cited by 293 publications

References 21 publications

Short- And Long-Term Wealth Gains From UK Takeovers: The Case Of The Financial Industry

Short- And Long-Term Wealth Gains From UK Takeovers: The Case Of The Financial Industry

Revisiting the merger and acquisition performance of European banks

Corporate Governance and Banks: What Have We Learned from the Financial Crisis?

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