The Effects of Cross-Border Bank Mergers on Bank Risk and Value

Abstract:     
This paper examines the effects of cross-border bank mergers on the risk and (abnormal) returns of acquiring banks. We find that overall, the acquirers risk neither increases nor decreases. In particular, on average neither their total risk nor their systematic risk fallsrelative to banks in their home banking market. The abnormal returns to acquirers arenegative and significant, but are somewhat higher when risk increases relative to banks in the acquirer s home country.

Number of Pages in PDF File: 35

Keywords: Banks, Mergers, Market reaction, International business

working papers series