Value Creating Mergers – British Bank Consolidation, 1885-1925
43 Pages Posted: 8 May 2020
Date Written: April 2020
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: Suggested Citation