Bidders, Rivals, and Wealth Creation of the Banking Market Consolidation in the Asia-Pacific Region

50 Pages Posted: 15 Jun 2016

See all articles by Sascha Kolaric

Sascha Kolaric

Technische Universität Darmstadt

Dirk Schiereck

Darmstadt University of Technology

Date Written: June 14, 2016

Abstract

We analyze the shareholder wealth implications of the financial sector consolidation in the Asia-Pacific region between 1995 and 2013. The results suggest that market power consideration play a prominent role when capital market participants value M&As between Asian financial institutions. Asian bidders achieve highly significant positive shareholder wealth effects, while their non-Asian peers obtain insignificant returns. Targets of non-Asian bidders earn significantly higher returns than targets of Asian bidders. At the same time, target rivals also stand to gain from further consolidation in the market. Overall, Asian bidders and their rivals profit from consolidation, particularly on the national level, suggesting that market power considerations may be a dominant motivation behind these mergers.

Keywords: Mergers and Acquisitions (M&A), Banks, Emerging Markets, Rival Reactions, Event Study, Market Power

JEL Classification: G14, G21, G34, F23

Suggested Citation

Kolaric, Sascha and Schiereck, Dirk, Bidders, Rivals, and Wealth Creation of the Banking Market Consolidation in the Asia-Pacific Region (June 14, 2016). Available at SSRN: https://ssrn.com/abstract=2795651 or http://dx.doi.org/10.2139/ssrn.2795651

Sascha Kolaric (Contact Author)

Technische Universität Darmstadt ( email )

Hochschulstrasse 1
Darmstadt, 64289
Germany

HOME PAGE: http://www.cofi.wi.tu-darmstadt.de/team_cofi/wimi_cofi/kolaric_cofi/index.en.jsp

Dirk Schiereck

Darmstadt University of Technology ( email )

Universitaets- und Landesbibliothek Darmstadt
Magdalenenstrasse 8
Darmstadt, Hesse D-64289
Germany

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