The impact of M&A deals in the European Banking sector
Paraskevopoulou, Ioanna
Fotiadou, Paraskevi
In this study the short-term and long term effects of cross border acquisitions are examined in the European banking industry. The event study methodology is performed as well as regression analysis in order to assess the stock price reaction of both targets and acquirers for the period 2001 to 2010 and define their determinants. Moreover, fundamental ratios are used in order to study the operating performance of the acquirers in the post acquisition period, which is two years. As far as the short term study is concerned, the findings state that targets are benefited from the event and show significant abnormal returns while acquirers do not. Furthermore, the regression analysis confirms that the determinants of abnormal returns are the intercept and slope of the market model, the return on equity, return on assets, loans to deposits, loans to assets, the target’s size and the operating margin. The study also concludes that the bidding firms are negatively affected in the post acquisition period in terms of profitability and liquidity.
masterThesis
Dissertations, Academic
Consolidation and merger of corporations--Europe
banks
longterm performance
Europe
cross- border
Consolidation and merger of corporations--Finance
event study methodology
acquisitions
Consolidation and merger of corporations--Accounting--Europe
