The role of timing at Mergers and Acquisitions in the banking industry

Luisa Mueller and Dirk Schiereck

International Journal of Monetary Economics and Finance, 2011, vol. 4, issue 1, 49-76

Abstract: We identify 72 bank Mergers and Acquisitions (M&As), in which US banks acquired other financial institutions. We focus on the role of timing at M&A in the context of boom phase and financial crisis. Applying event study methodology, we examine: value generation to bank shareholders; value implications on bank shareholders according to rival banks' M&A considering whether transactions are undertaken prior to or during crisis. Since we identify JPMorgan Chase & Co. as crisis winner, we compare its returns with the results of competitors. The findings partially confirm our hypotheses that a well-performing bank creates value through M&A.

Keywords: M&A; mergers and acquisitions; bank mergers; event study; subprime mortgages; financial crisis; banking industry; value generation; US banks; USA; United States; value creation; subprime crisis. (search for similar items in EconPapers)
Date: 2011
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