Abstract

https://ssrn.com/abstract=1478831
 


 



Bank M&A: A Market Power Story?


Yassin Hankir


Frankfurt School of Finance & Management - FIPEMA

Christian Rauch


University of Oxford - Said Business School

Marc P. Umber


Frankfurt School of Finance & Management

July 9, 2009

Journal of Banking and Finance, Vol. 35, No. 9, 2011

Abstract:     
This paper analyzes capital market reactions to international bank M&A. We investigate the 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. The findings show that there are more investors who believe in gains through the exploitation of market power by the post-merger entity than investors who believe in any of the other motives tested in the paper. 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.

Keywords: M&A, Banks, Event Study, Peer Returns, Market Power

JEL Classification: G34, G21, G14, L13


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Date posted: September 27, 2009 ; Last revised: May 29, 2012

Suggested Citation

Hankir, Yassin and Rauch, Christian and Umber, Marc P., Bank M&A: A Market Power Story? (July 9, 2009). Journal of Banking and Finance, Vol. 35, No. 9, 2011. Available at SSRN: https://ssrn.com/abstract=1478831

Contact Information

Yassin Hankir
Frankfurt School of Finance & Management - FIPEMA ( email )
Sonnemannstraße 9-11
Frankfurt am Main, 60314
Germany
+49-69-154008-389 (Phone)
+49-69-154008-388 (Fax)
HOME PAGE: http://www.frankfurt-school.de/fipema
Christian Rauch
University of Oxford - Said Business School ( email )
Park End Street
Oxford, OX1 1HP
Great Britain

Marc P. Umber (Contact Author)
Frankfurt School of Finance & Management ( email )
Sonnemannstraße 9-11
Frankfurt am Main, 60314
Germany
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