Riding on the FinTech Wave: Disruption and Value Creation in Corporate Takeovers

41 Pages Posted: 16 Feb 2022 Last revised: 27 Nov 2023

See all articles by Joanna (Xiaoyu) Wang

Joanna (Xiaoyu) Wang

Georgia State University

Alan L. Zhang

Florida International University (FIU)

Date Written: November 18, 2023


FinTech companies and FinTech mergers are increasingly prevalent over the recent decades. This paper explores the motives and consequences of FinTech adoption through corporate takeovers. Acquiring firms experience FinTech disruptions in the post-merger period. FinTech firms become highly sought-after in mergers and acquisitions (M&As). We find significant value-creation of FinTech mergers in both short-term and long-term, especially when acquirers ex-ante conduct FinTech-related businesses. Specifically, FinTech mergers increase the valuation of combined firms by 2.2% around the deal announcements, and such value creation is more pronounced than non-FinTech mergers. Moreover, FinTech mergers generate positive spillover effects on target peers, including favorable market reactions to the industry peers in the short term and FinTech merger waves in the long term.

Keywords: FinTech, Mergers and acquisitions, Value creation, Industry peers, Merger waves, FinTech Disruption

JEL Classification: G10, G14, G30, G34

Suggested Citation

Wang, Xiaoyu and Zhang, Alan L., Riding on the FinTech Wave: Disruption and Value Creation in Corporate Takeovers (November 18, 2023). Available at SSRN: https://ssrn.com/abstract=4033856 or http://dx.doi.org/10.2139/ssrn.4033856

Xiaoyu Wang

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Alan L. Zhang (Contact Author)

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

HOME PAGE: http://www.alanlzhang.com

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