The determinants of failed takeovers in the banking sector: Deal or country characteristics?

Stefano Caiazza and Alberto Pozzolo

Journal of Banking & Finance, 2016, vol. 72, issue S, S92-S103

Abstract: The consolidation process which characterized the banking industry in the last decades has been widely analyzed, but very few studies have investigated the reasons which bring a number of announced deals to failure. We fill this gap in the literature analyzing the characteristics of failed M&A operations in a large sample, including all the major domestic and cross-border deals in the banking sector announced worldwide between 1992 and 2010. The results show that the most important factors which determine the failure of an announced operation are deal specific characteristics, in particular the hostility of the bidder and the presence of multiple potential acquirers. Moreover, lengthier negotiations have a lower probability of success. Contrary to expectations, cross-border operations are more likely to be successfully completed than domestic ones.

Keywords: M&As; Bank; Abandoned deals; Failed takeovers (search for similar items in EconPapers)
JEL-codes: G15 G21 G34 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:72:y:2016:i:s:p:s92-s103

DOI: 10.1016/j.jbankfin.2016.04.011

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