Posted: 16 Feb 2022 Last revised: 22 Feb 2022
Date Written: February 12, 2022
FinTech companies and FinTech mergers are increasingly prevalent over the past decades. This paper explores the motives and consequences of FinTech mergers. FinTech firms have a greater likelihood of becoming targets in mergers and acquisitions (M&As). FinTech mergers increase the valuation of combined firms by 2.15%, and such value creation is significantly greater than non-FinTech mergers. Acquirers adopt cutting-edge technologies through M&Asand subsequently become FinTech firms. Moreover, FinTech mergers generate spillover effects to peer firms in the merging industries. We document positive 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
JEL Classification: G10, G14, G30, G34
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