This study examines the short-term and long-term wealth effects of 96 cross-border bank mergers between 1985 and 2005. In the short-term, even after a thorough accounting for information leakage, transactions are found to be wealth-creating, albeit only on a net basis with target gains more than compensating for bidder losses. Contrary to earlier evidence, no abnormal long-term returns are detected, which supports the validity of the inferences drawn from the short-term. Furthermore, a thorough analysis of factors that can explain wealth creation ex-ante suggests that bidder and net wealth creation is higher if bidders take over targets that are already relatively cost efficient ex-ante and do not acquire in «hot» deal markets.
Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2008. 266 pp., num. tables and graphs
Contents: The Market for Cross-Border Bank M&A – Theoretical Foundations of Banking and M&A – Previous Empirical Evidence
on Wealth Effects of Cross-Border Bank M&A – Design of Analysis – New Empirical Evidence on Wealth Effects of Cross-Border