Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30170
Authors: 
Hankir, Yassin
Rauch, Christian
Umber, Marc P.
Year of Publication: 
2009
Series/Report no.: 
Working paper series // Frankfurt School of Finance & Management 129
Abstract: 
This paper analyzes capital market reactions to international bank M&A. We investigate combined stock return patterns of targets, bidders, and their peers upon takeover announcement, and closing or withdrawal. We distinguish five common M&A hypotheses and relate characteristic and mutually exclusive abnormal stock return patterns to each hypothesis. We find that investors believe in gains through the exploitation of market power by the post-merger entity. In a multinomial logistic model we show that patterns related to market power significantly concur with large relative target size, intra-industry mergers, and increasing market concentration, suggesting a substantial lessening of competition through M&A.
Subjects: 
M&A
Banks
Event Study
Peer Returns
Market Power
JEL: 
G34
G21
G14
L13
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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