Bank Mergers and Acquisitions in Emerging Markets: Evidence from Asia and Latin America

37 Pages Posted: 17 Feb 2012

See all articles by John Goddard

John Goddard

Bangor University - Bangor University

Philip Molyneux

University of Sharjah; University of Sharjah - College of Business Administration

Tim Mi Zhou

Sunderland Business School

Date Written: August 1, 2011

Abstract

Following a global wave of consolidation in the banking industry, this study analyses 132 mergers and acquisitions (M&As) involving banks in emerging markets in Asia and Latin America between 1998 and 2009. An event study measures the change in shareholder value for acquirers and targets; and a multivariate regression identifies the drivers of the change in shareholder value for acquirers. On average M&A creates shareholder value for target firms, while acquirer firms do not lose shareholder value. Geographical diversification creates shareholder value for acquirers. Acquirer shareholders benefit from the acquisition of underperforming targets; from transactions settled by cash rather than exchange of equity; and from government-instigated M&A transactions.

Keywords: banks, emerging markets, mergers and acquisitions

JEL Classification: G14, G21, G34

Suggested Citation

Goddard, John and Molyneux, Philip and Molyneux, Philip and Zhou, Tim Mi, Bank Mergers and Acquisitions in Emerging Markets: Evidence from Asia and Latin America (August 1, 2011). Available at SSRN: https://ssrn.com/abstract=2006372 or http://dx.doi.org/10.2139/ssrn.2006372

John Goddard

Bangor University - Bangor University ( email )

Bangor, Wales LL57 2DG
United Kingdom

Philip Molyneux

University of Sharjah ( email )

College of Business Administration
University of Sharjah
Sharjah, Sharjah
United Arab Emirates

HOME PAGE: http://www.sharjah.ac.ae/en/academics/Colleges/business/Pages/ppl_detail.aspx?mcid=1

University of Sharjah - College of Business Administration ( email )

University City Road
Sharjah, 27272
United Arab Emirates

Tim Mi Zhou (Contact Author)

Sunderland Business School ( email )

The Reg Vardy Centre
St Peter's Way
Sunderland, SR6 0DD
United Kingdom
0191 515 3341 (Phone)

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