Do M&As Create Value for Shareholders? The Long-Term Wealth Effect

Franco Fiordelisi

Chapter 6 in Mergers and Acquisitions in European Banking, 2009, pp 119-133 from Palgrave Macmillan

Abstract: Abstract This chapter analyzes the effects of Merger and Acquisitions (M&As) between European banks over a five-year period by comparing shareholder value levels prior and successive to the deal itself (see Altunbus and Margques-Ibanez, 2004). Our analysis presents innovative features since, as far as we know, it is the first to analyze the effects of the shareholders’ value created (measured by EVA) in the medium term for non-listed banks. Various studies analyzed the M&A effects on banks’ performance, usually by focusing on traditional financial indicators. However, none used shareholder value measures to take into account for the opportunity cost of capital. In addition, we selected a large sample of banks focusing the European banking sectors — and more specifically on France, Germany, Italy, and the United Kingdom — during 1995–2002.

Keywords: Total Asset; Equity Capital; Loan Loss; European Banking; Capital Charge (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-24540-2_6

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DOI: 10.1057/9780230245402_6

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