What do premiums paid for bank M&As reflect? The case of the European Union

Jens Hagendorff, Ignacio Hernando, Maria J. Nieto and Larry Wall

Journal of Banking & Finance, 2012, vol. 36, issue 3, 749-759

Abstract: We analyze the takeover premiums paid for a sample of domestic and cross-border bank takeovers in the European Union between 1997 and 2007. We find that acquiring banks value profitable, high-growth and low risk targets. We also find that the strength of bank regulation and supervision as well as deposit insurance regimes in Europe have measurable effects on takeover pricing. Stricter bank regulatory regimes and stronger deposit insurance schemes lower the takeover premiums paid by acquiring banks. This result, presumably in anticipation of higher compliance costs, is driven by domestic deals. Similar qualitative results are found for both the entire sample and the sample of publicly traded targets.

Keywords: Banks; Mergers; Premiums; Europe (search for similar items in EconPapers)
JEL-codes: G21 G28 G34 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378426611001142
Full text for ScienceDirect subscribers only

Related works:
Working Paper: What do premiums paid for bank M&As reflect? The case of the European Union (2010)
Working Paper: What do premiums paid for bank M&As reflect? the case of the European Union (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:36:y:2012:i:3:p:749-759

DOI: 10.1016/j.jbankfin.2011.03.009

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().