U.S. Bank M&As in the Post-Dodd-Frank Act Era: Do They Create Value?

Leledakis, George N.; Pyrgiotakis, Emmanouil G.

doi:10.1016/j.jbankfin.2019.06.008

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U.S. Bank M&As in the Post-Dodd-Frank Act Era: Do They Create Value?

Journal of Banking & Finance, volume 135, 2022[10.1016/j.jbankfin.2019.06.008]

60 Pages Posted: 25 Aug 2016 Last revised: 20 Sep 2024

See all articles by George N. Leledakis

George N. Leledakis

Athens University of Economics and Business, School of Business, Department of Accounting and Finance

Emmanouil G. Pyrgiotakis

University of Essex - Essex Business School

Date Written: May 1, 2019

Abstract

We analyze the impact of the Dodd-Frank Act on the shareholder wealth gains using a sample of 640 completed U.S. M&As announced between 1990 and 2014. Our results indicate a positive DFA effect on announcement period abnormal returns in small bank mergers. In fact, mergers with combined firm assets of less than $10 billion create more shareholder value after the DFA, than ever before. This positive announcement effect in small deals appears to be linked with merger-related compliance cost savings and profitability improvements. By examining long-run abnormal returns, we find that the documented DFA effect on small deals announcement abnormal returns does not disappear overtime. Finally, we do not find such effects for non-U.S. bank M&As over the same period.

Keywords: Dodd-Frank regulation, shareholder wealth, market anticipation, event study

JEL Classification: G14, G21, G28, G34

Suggested Citation: Suggested Citation

Leledakis, George N. and Pyrgiotakis, Emmanouil G., U.S. Bank M&As in the Post-Dodd-Frank Act Era: Do They Create Value? (May 1, 2019). Journal of Banking & Finance, volume 135, 2022[10.1016/j.jbankfin.2019.06.008], Available at SSRN: https://ssrn.com/abstract=2828652 or http://dx.doi.org/10.1016/j.jbankfin.2019.06.008