Consolidation and value creation in the insurance industry: The role of governance

Narjess Boubakri, Georges Dionne () and Thouraya Triki
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Narjess Boubakri: HEC Montreal, Department of Finance
Thouraya Triki: HEC Montreal, Canada Research Chair in Risk Management

No 06-8, Working Papers from HEC Montreal, Canada Research Chair in Risk Management

Abstract: We examine the long run performance of M&A transactions in the property-liability insurance industry. We specifically investigate whether such transactions create value for the bidders’ shareholders and assess how corporate governance mechanisms affect such performance. Our results show that M&A create value in the long run as buy and hold abnormal returns are positive and significant after three years. While tender offers appear to be more profitable than mergers, our evidence does not support the conjecture that domestic transactions create more value than cross border transactions. Furthermore, positive returns are significantly higher for frequent acquirers and in countries where investor protection is better. Internal corporate governance mechanisms are also significant determinants of the performance of bidders.

Keywords: Merger and acquisition; property-liability insurance; governance; value creation; performance of bidders (search for similar items in EconPapers)
JEL-codes: D80 G22 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2006-06-13
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Related works:
Journal Article: Consolidation and value creation in the insurance industry: The role of governance (2008)
Working Paper: Consolidation and Value Creation in the Insurance Industry: the Role of Governance (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:crcrmw:2006_008

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