Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70685
Authors: 
Hagendorff, Jens
Hernando, Ignacio
Nieto, Maria J.
Wall, Larry D.
Year of Publication: 
2010
Series/Report no.: 
Working Paper, Federal Reserve Bank of Atlanta 2010-5
Abstract: 
We analyze the takeover premiums paid for a sample of European bank mergers between 1997 and 2007. We find that acquiring banks value profitable, high-growth, and low-risk targets. We also find that the strength of bank regulation and supervision and of deposit insurance regimes in Europe has measurable effects on takeover pricing. Stricter bank regulatory regimes and stronger deposit insurance schemes lower the takeover premiums paid by acquiring banks. This result, presumably in anticipation of higher compliance costs, is mainly driven by domestic deals. Also, we find no conclusive evidence that bidders seek to extract benefits from regulators either by paying a premium for deals in less regulated regimes or becoming too big to fail.
Subjects: 
banks
mergers
premiums
Europe
JEL: 
G21
G34
G28
Document Type: 
Working Paper

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