Impact of the Financial Crisis on Banking Acquisitions: A Look at Shareholder Wealth

Rekha Rao-Nicholson and Julie Salaber

International Journal of the Economics of Business, 2015, vol. 22, issue 1, 87-117

Abstract: This paper examines the influence of the 2007-08 financial crisis on value creation for acquirer's shareholders in the banking industry using a sample of 883 deals over 2004-12. Applying an exploratory and top-down approach, banking acquisitions are considered at the global level, narrowing the analysis step by step to consider domestic versus cross-border acquisitions. Then cross-border deals are split based on the economic development of the acquirer and target countries. It is observed that only acquisitions involving emerging-economy acquirers and developed-economy targets generate positive and significant returns to shareholders after the crisis. Major changes in the global acquisition landscape are also observed since 2007, with emerging-economy banks increasing their acquisition activity, both nationally and internationally.

Date: 2015
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DOI: 10.1080/13571516.2014.982901

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