Is M&A Different During a Crisis? Evidence from the European Banking Sector

34 Pages Posted: 3 Oct 2011 Last revised: 4 Jan 2012

See all articles by Andrea Beltratti

Andrea Beltratti

Bocconi University - Department of Finance

Giovanna Paladino

IntesaSanpaolo; LUISS Economics Department

Date Written: September 1, 2011

Abstract

The financial crisis has affected the landscape of the banking sector around the world. We use a sample of transactions taking place in Europe in 2007-2010 to study the acquirer’s stock price market reaction to announcements and completions of acquisitions. We find that there are no significant abnormal returns around the announcement of an acquisition while there are positive abnormal returns at completions. We study the cross-sectional determinants of abnormal returns and find that announcement returns are mainly explained by the acquirer bank characteristics, while completion returns depend on opacity of the target and in large part on the drop in volatility associated with a reduction of uncertainty.

Suggested Citation

Beltratti, Andrea and Paladino, Giovanna, Is M&A Different During a Crisis? Evidence from the European Banking Sector (September 1, 2011). Midwest Finance Association 2012 Annual Meetings Paper. Available at SSRN: https://ssrn.com/abstract=1928513 or http://dx.doi.org/10.2139/ssrn.1928513

Andrea Beltratti (Contact Author)

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

Giovanna Paladino

IntesaSanpaolo ( email )

Piazza San Carlo
Torino, 10121
Italy

LUISS Economics Department ( email )

Viale di Villa Massimo, 57
Rome, 00161
Italy

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