Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264499 
Year of Publication: 
2022
Series/Report no.: 
ECB Working Paper No. 2674
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
This paper studies the bilateral drivers of mergers and acquisitions (M&As) between European banks. Two findings document that banks use M&A as a device to leverage their expertise rather than to diversify. (i) Following the literature on matrimonial matching by using a binary logit model, the paper examines how the structure of acquiring banks in terms of geographical location (headquarters and subsidiaries) influences the choice of targeted banks for an M&A transaction. It finds that banks favour domestic expansion over international diversification. (ii) The paper investigates how the business model of acquiring banks determines their selection of targeted banks. Very often, banks tend to target counterparts with the same business model or, to a lesser extent, those with the same business model as one of their subsidiaries.
Subjects: 
Banks
mergers and acquisitions
internal organisation
domestic footprint
economies of scale
JEL: 
G21
G34
L22
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-5123-4
Document Type: 
Working Paper

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