Post-Merger Strategy and Performance: Evidence from the US and European Banking Industries

27 Pages Posted: 24 Nov 2009

See all articles by Jens Hagendorff

Jens Hagendorff

University of Edinburgh - Business School

Kevin Keasey

University of Leeds - Division of Accounting and Finance

Date Written: 2009-03-09

Abstract

The banking industry has one of the most active markets for mergers and acquisitions. However, little is known about the type of operational strategies adopted by banking firms in the years following a deal. For a sample of bidding banks in the USA and Europe, this study compares the design and performance implications of different post-merger strategies in both geographical regions. Using accounting data, we show that European banks pursue a cost-cutting strategy by increasing efficiency levels vis-à-vis non-merging banks and by cutting back on both labour costs and lending activities. US banks, on the other hand, raise both interest and non-interest income in the post-merger period.

Suggested Citation

Hagendorff, Jens and Keasey, Kevin, Post-Merger Strategy and Performance: Evidence from the US and European Banking Industries (2009-03-09). Accounting & Finance, Vol. 49, Issue 4, pp. 725-751, December 2009, Available at SSRN: https://ssrn.com/abstract=1512863 or http://dx.doi.org/10.1111/j.1467-629X.2009.00306.x

Jens Hagendorff

University of Edinburgh - Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
UNITED KINGDOM

Kevin Keasey

University of Leeds - Division of Accounting and Finance ( email )

Leeds LS2 9JT
United Kingdom
+44 (0)113 343 2618 (Phone)

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