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Market Response to Announcements of Mergers of Canadian Financial Institutions

27 Pages Posted: 1 Jul 2015  

Sebouh Aintablian

American University of Beirut

Gordon S. Roberts

York University - Schulich School of Business

Date Written: June 30, 2015

Abstract

This study examines a sample of mergers of Canadian Financial Institutions during the 1990’s to determine whether in-pillar, cross-pillar and foreign mergers are value-enhancing, and to determine possible sources of synergies behind those mergers. It develops testable hypotheses for Canadian FI mergers by synthesizing prior U.S. tests in the context of Canadian institutional arrangements. The overall results support the generality of findings of prior U.S. studies that the average abnormal return for both the acquiring and target firms is positive and statistically significant. This result suggests that acquisitions in the financial industry are, in Canada as elsewhere, driven by value-maximizing motivations.

Keywords: Bank merger announcements, Canada

JEL Classification: G21

Suggested Citation

Aintablian, Sebouh and Roberts, Gordon S., Market Response to Announcements of Mergers of Canadian Financial Institutions (June 30, 2015). Multinational Finance Journal, Vol. 9, No. 1/2, p. 72-98, 2005. Available at SSRN: https://ssrn.com/abstract=2625110

Sebouh Aintablian (Contact Author)

American University of Beirut ( email )

850 Third Avenue, 18th floor
New York, NY 10022-6297
United States

Gordon S. Roberts

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416-736-2100 x77953 (Phone)
416-736-5687 (Fax)

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