Value Creating Mergers – British Bank Consolidation, 1885-1925

43 Pages Posted: 8 May 2020

See all articles by Fabio Braggion

Fabio Braggion

Tilburg University - Tilburg University School of Economics and Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Narly Dwarkasing

University of Bonn - Institute for Financial Economics and Statistics

Lyndon Moore

Monash University

Date Written: April 2020

Abstract

The British banking sector had many small banks in the mid-nineteenth century. From around 1885 until the end of World War One there was a process of increasingly larger mergers between banks. By the end of the merger wave the English and Welsh market was highly concentrated, with only five major banks. News of a merger brought a persistent rise in the share prices of both the acquiring and the target bank (roughly 1% and 7%, respectively). Non-merging banks, especially those whose local market concentration rose as a result of the merger, saw their stock prices rise.

Keywords: Banking, Great Britain, mergers and acquisitions

JEL Classification: G34, N23, N24

Suggested Citation

Braggion, Fabio and Dwarkasing, Narly and Moore, Lyndon, Value Creating Mergers – British Bank Consolidation, 1885-1925 (April 2020). CEPR Discussion Paper No. DP14663, Available at SSRN: https://ssrn.com/abstract=3594295

Fabio Braggion (Contact Author)

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Narly Dwarkasing

University of Bonn - Institute for Financial Economics and Statistics ( email )

Adenauerallee 24-42
Bonn, 53113
Germany

Lyndon Moore

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

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