The effect of mergers and acquisitions on shareholder wealth: the case of European banks

L'effet des fusions et acquisitions sur la richesse des actionnaires: le cas des banques européennes

Abdourahmane Diaw

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Abstract: In this paper we investigate the effect of announcements of mergers and acquisitions on bank shareholder wealth. Despite the major impact of the phenomenon of mergers and acquisitions on the future of the European banking industry, there are currently few studies that investigated this area. This is largely due to the fact that it is a relatively recent phenomenon since it began to grow in 1997. Based on a sample of 97 European banks over the period 1997-2008, our study showed that the European banking mergers and acquisitions create value but all of this value created by the purchaser's bid is received by the shareholders of the target. These appear to be the main beneficiaries of mergers and acquisition. However, shareholders of acquiring banks, meanwhile, are not harmed by the operations of mergers and acquisitions initiated by their leaders.

Keywords: Mergers and acquisitions; bank mergers and acquisition; European banking market JEL Classification: G14 G24 G34 2 (search for similar items in EconPapers)
Date: 2011-05-12
Note: View the original document on HAL open archive server: https://hal.science/hal-01184673
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Published in First International Conference of Cost Action IS0902, Systemic Risks, Financial Crises, and Credit, COST, May 2011, Saint-Denis, France

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Working Paper: The effect of mergers and acquisitions on shareholder wealth: the case of European banks (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01184673

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