Measuring Value Creation in Bank Mergers and Acquisitions

F. PALMUCCI, A. CARUSO (2011). Measures of Market Reaction in Mergers and Acquisitions in Italy. CORPORATE OWNERSHIP & CONTROL, vol. 8, p. 131-144, ISSN: 1727-9232.

22 Pages Posted: 5 Mar 2005 Last revised: 30 Jan 2013

See all articles by Fabrizio Palmucci

Fabrizio Palmucci

University of Bologna, Department of Management

Annalisa Caruso

University of Bologna - Department of Management

Date Written: January 17, 2008

Abstract

This paper performs an event study on mergers and acquisitions between publicly listed Italian banks. Our study shows that previous literature may have only partially captured the market reaction by choosing the announcement date as the event date. In less efficient markets that date is not sufficiently accurate to capture all the market reaction because of the leakage of information. Using the rumours date instead, we find that in our sample the overall market value creation can even become from negative to positive. Moreover, we also find evidence that in Italy private benefits are more likely to drive the bidders' decisions rather than value creation goals.

Keywords: mergers and acquisitions, banking sector, event study, market value creation, rumours

JEL Classification: G14, G21, G34

Suggested Citation

Palmucci, Fabrizio and Caruso, Annalisa, Measuring Value Creation in Bank Mergers and Acquisitions (January 17, 2008). F. PALMUCCI, A. CARUSO (2011). Measures of Market Reaction in Mergers and Acquisitions in Italy. CORPORATE OWNERSHIP & CONTROL, vol. 8, p. 131-144, ISSN: 1727-9232.. Available at SSRN: https://ssrn.com/abstract=676522 or http://dx.doi.org/10.2139/ssrn.676522

Fabrizio Palmucci (Contact Author)

University of Bologna, Department of Management ( email )

Via Capo di Lucca, 34
Bologna, Bologna 40126
Italy
+39051246411 (Fax)

HOME PAGE: http://www.sa.unibo.it

Annalisa Caruso

University of Bologna - Department of Management ( email )

Piazza Scaravilli 1
Bologna, Bologna 40126
Italy

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