Bank mergers and acquisitions in emerging markets: evidence from Asia and Latin America

John Goddard, Philip Molyneux () and Tim Zhou

The European Journal of Finance, 2012, vol. 18, issue 5, 419-438

Abstract: Following a global wave of consolidation in the banking industry, this study analyses 132 mergers and acquisitions (M&As) involving banks in emerging markets in Asia and Latin America between 1998 and 2009. An event study measures the change in shareholder value for acquirers and targets; and a multivariate regression identifies the drivers of the change in shareholder value for acquirers. On average M&As create shareholder value for target firms, while acquirer firms do not lose shareholder value. Geographical diversification creates shareholder value for acquirers. Acquirer shareholders benefit from the acquisition of underperforming targets; from transactions settled by cash rather than exchange of equity; and from government-instigated M&A transactions.

Date: 2012
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DOI: 10.1080/1351847X.2011.601668

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