Cross-Border Bank Mergers and Acquisitions: What Factors Pull and Push Banks Together?

2013 ◽  
Vol 16 (04) ◽  
pp. 1350022 ◽  
Author(s):  
Dongyun Lin ◽  
James Barth ◽  
John Jahera ◽  
Keven Yost
Keyword(s):  
Mergers And Acquisitions ◽  
Banking Sector ◽  
Bank Regulation ◽  
Merger And Acquisition ◽  
Bank Mergers ◽  
Regulatory Factors ◽  
Cross Border ◽  
Country Specific ◽  
Unique Dataset

This paper evaluates factors that encourage or impede cross-border mergers and acquisitions in banking. The effects of bank specific features, as well as bank regulatory factors, from both target and acquiring banks' perspectives, are estimated. Three comprehensive databases are combined to provide a unique dataset to study cross-border merger and acquisition activities of banks. Banking sector regulatory variables included make this study among the first to empirically and comprehensively analyze the interrelationship between bank regulation and cross-border bank mergers and acquisitions. The results indicate that both bank characteristics and country specific characteristics are important determinants of banks' cross-border merger and acquisition activities.

scholarly journals Domestic banking sector development and cross border mergers and acquisitions in Africa

2012 ◽  
Vol 2 (1) ◽  
pp. 32-42 ◽  
Author(s):  
Elikplimi K. Agbloyor ◽  
Joshua Abor ◽  
Charles K.D. Adjasi ◽  
Alfred Yawson
Keyword(s):  
Mergers And Acquisitions ◽  
Banking Sector ◽  
Cross Border ◽  
Banking Sector Development

scholarly journals Selecting Legal Advisors in M&As: Organizational Learning and the Role of Multiplicity of Mental Models

2018 ◽  
Vol 45 (5) ◽  
pp. 2193-2224 ◽  
Author(s):  
Bastian Westbrock ◽  
Katrin Muehlfeld ◽  
Utz Weitzel
Keyword(s):  
Organizational Learning ◽  
Mergers And Acquisitions ◽  
Mental Models ◽  
Selection Criteria ◽  
Turning Point ◽  
Firm Characteristics ◽  
Selection Rules ◽  
Cross Border ◽  
Country Specific

Management scholars have identified a variety of firm characteristics as antecedents to organizational learning. In this study, we conceptualize intraorganizational multiplicity of mental models as a complementary element that facilitates shifting from lower- to higher-level learning. Specifically, we investigate whether multiplicity of mental models—proxied by four measures—helps acquirers to categorically adapt selection rules for legal advisors in mergers and acquisitions (M&As) from domestic toward international settings. In developing our conceptual framework, we integrate resource-based, social network, and organizational learning perspectives. Empirically, we draw on 11,511 acquisition attempts announced from 1998 to 2010 (completion/abandonment assessed as of January 10, 2015, at the latest). The results largely support our theory: First, choosing legal advisors in domestic and international deals calls for different selection rules. While in domestic deals, network-related characteristics are more important drivers of lawyers’ performance relative to their country-specific expertise, the comparative relevance of these attributes is reversed in cross-border deals. Yet, initially, acquirers fail to recognize this. Also, they do not initially adjust their selection criteria appropriately in response to accumulating M&A experience of their own. Only after having attempted a substantial number of cross-border M&As, they reach a turning point at which they rebalance their selection criteria such that they reflect the predominant relevance of country expertise in cross-border settings. Finally, recognition of the need to categorically reassess selection criteria in international deals is significantly facilitated by an acquirer’s multiplicity of mental models.

Effects of Cross-border Merger and Acquisition on the Operational Risk of US and Canadian Companies

2020 ◽  
pp. 097215091989509
Author(s):  
Bruno Lopes de Paula ◽  
Daiana Paula Pimenta ◽  
Ricardo Limongi França Coelho ◽  
Jaluza Maria Lima Silva Borsatto ◽  
Rafael Manoel de Oliveira
Keyword(s):  
Decision Making ◽  
Panel Data ◽  
Mergers And Acquisitions ◽  
Emerging Economies ◽  
Operational Risk ◽  
Merger And Acquisition ◽  
Emerging Countries ◽  
Cross Border ◽  
The World ◽  
The Relationship

The integration of the world economies is responsible for an increase in the number of cross-border mergers and acquisitions (M&A), together with the growing participation of companies from emerging countries in this type of investment. However, the area studies focus their analyses on the determinants, antecedents and profitability of the companies, leaving the effects of this type of business on the operational risk of the companies involved as a gap to be explored. To fill it, we used panel data regressions to identify the relationship between cross-border M&A and the operational risk of companies. The results indicate that acquiring companies based in emerging economies are the ones that suffer the most significant impacts on this type of business. As the implication, this study serves as a basis for the decision-making of the managers of the acquiring companies, being able to identify the risks of this activity and the ways of preventing them.

scholarly journals Concentration of Ukraine’s Banking System: Myths and Facts

2015 ◽  
pp. 6-38 ◽  
Author(s):  
Vladyslav Rashkovan ◽  
Roman Kornyliuk
Keyword(s):  
Mergers And Acquisitions ◽  
Banking Sector ◽  
Banking System ◽  
Bank Mergers ◽  
Negative Consequences ◽  
Public Authorities ◽  
Substantial Impact ◽  
Banking Concentration ◽  
National Bank ◽  
Market Consolidation

This article attempts to find answers to questions of current significance: How concentrated is Ukraine’s banking system from the viewpoint of the world’s best regulatory practices and in comparison with other countries? What has been the driving force behind the growing concentration in recent years and does this process pose a threat to competition in the banking system? What effect would mergers and acquisitions in the banking sector have on the concentration of the banking system? And finally, do public authorities have to stimulate consolidation in the banking system or, on the contrary, restrain potential bank mergers and acquisitions? The results of empirical analysis dispel the persisting myths about the risks of fast and excessive concentration resulting from continuing market consolidation and about the substantial impact of inequality on the growing concentration, and refute the perceived danger of mergers and acquisitions in the banking sector. Instead, it was discovered that concentration of banking assets in Ukraine is not substantial according to the Herfindahl–Hirschman Index (HHI), CRn concentration index and other ratios. At the same time, in the conditions of continuing consolidation of the banking system via mergers and acquisitions and a decreasing number of banks, upward trends are observed within moderate, average European levels. Therefore, these new conditions require closer attention on the part of banking regulators to assess possible consequences of concentration. This article provides recommendations to the National Bank of Ukraine (NBU) and the Antimonopoly Committee of Ukraine (AMCU) on how to improve monitoring of banking concentration processes and better regulate consolidation processes in bank mergers and acquisitions. A complex of preventive macroprudential measures was offered to offset the negative consequences of concentration and achieve an optimal degree of market consolidation.

Strategic and financial similarities of bank mergers

2016 ◽  
Vol 26 (1) ◽  
pp. 50-68 ◽  
Author(s):  
Sony Kuriakose ◽  
Justin Paul
Keyword(s):  
Mergers And Acquisitions ◽  
Design Methodology ◽  
Banking Sector ◽  
Relative Size ◽  
Transformation Process ◽  
Adverse Impact ◽  
Bank Mergers ◽  
Financial Leverage ◽  
Content Type ◽  
Bank Merger

Purpose – Consolidation through mergers and acquisitions indicates one of the major outcomes of the financial transformation process and contemporary trend in the Indian banking sector. Literature suggests that the pre-merger financials of banks are crucial in deciding the post-merger performance of merged entities. In this context, the aim of the present study is to provide insights on the strategic and financial similarities of merging partners in the bank mergers that occurred in the post-liberalization India. Design/methodology/approach – This paper considers all bank merger deals in the post-liberalization period, which involve purchase consideration either in the form of stock or cash. Hypotheses about the strategic similarities and dissimilarities are tested. The study considers all important aspects such as relative size of targets, diversity of earnings, efficiency, financial leverage, prudential norms and profitability. Findings – The study finds that banks are dissimilar in most of the key areas, and these might have an adverse impact on the post-merger performance. Originality/value – The study is original because we take into account all the bank merger deals in the period, which involve purchase consideration either in the form of stock or cash.

scholarly journals Cross-border Mergers and Acquisitions in the Context of Perception of the Factors of Their Implementation in the Pre- and-Post-Merger-and-Acquisition Process

2018 ◽  
Vol 66 (5) ◽  
pp. 609-632 ◽  
Author(s):  
Jaroslava Hečková ◽  
Miroslav Frankovský ◽  
Zuzana Birknerová ◽  
Alexandra Chapčáková
Keyword(s):  
Mergers And Acquisitions ◽  
Merger And Acquisition ◽  
Acquisition Process ◽  
Cross Border

scholarly journals Revocation of a Banking License as an Instrument for Regulating Merger and Acquisition Transactions

2019 ◽  
Vol 8 (4) ◽  
pp. 8881-8884
Keyword(s):  
Decision Making ◽  
Mergers And Acquisitions ◽  
Banking Sector ◽  
Merger And Acquisition ◽  
Additional Information ◽  
Earnings Per Share ◽  
State Participation ◽  
License Revocation ◽  
The Cost ◽  
The Impact

The article analyzes the dynamics of the indicators of the merger and acquisition market in the banking sector, as well as the indicator of revocation of banking licenses. The analysis has shown the outperformance of bank decrease in relation to bank acquisition over the same period, which indicates a significant impact of license revocation on the merger and acquisition market. The article assesses the impact of the merger and acquisition market on the structure of proportional regulation in favor of banks with universal licenses. An increase in the concentration of capital is observed, especially in banks with state participation. The article investigates the methods of calculating the cost of mergers and acquisitions. The authors propose to add two more factors to the already known factors of change in earnings per share due to mergers and acquisitions: the type of license revoked by the regulator as a result of the rehabilitation and goodwill, which should be considered in the merger cost using additional coefficients. This will allow the merger cost to be more accurately determined and provide the investor with additional information for decision-making.

scholarly journals Cross-Border Mergers and Acquisitions as a Challenge for Sustainable Business

2019 ◽  
Vol 11 (11) ◽  
pp. 3130 ◽  
Author(s):  
Jaroslava Hečková ◽  
Róbert Štefko ◽  
Miroslav Frankovský ◽  
Zuzana Birknerová ◽  
Alexandra Chapčáková ◽  
...  
Keyword(s):  
Mergers And Acquisitions ◽  
Merger And Acquisition ◽  
Sustainable Business ◽  
Cross Border ◽  
European Area ◽  
The Future ◽  
Basic Parameters ◽  
Research Gap ◽  
The Subject ◽  
Variance Explained

When considering the challenges for sustainable business, companies implementing cross-border reallocation of capital by means of mergers and acquisitions should take into account the context and evaluation of attributes of their future implementation. The main aim of the paper is, therefore, to identify and specify the key attributes of sustainable cross-border mergers or acquisitions (M&As) influencing the considerations about their future implementation. On the basis of the views of managers from 120 companies (international corporations selected from the Zephyr database) located in 45 countries within the European area that had previously been the subject of a cross-border merger or acquisition, significant attributes were extracted in connection with their experience from their implementation. These attributes are taken into account when considering the implementation of a cross-border merger or acquisition in the future. A factor analysis of the data obtained allowed the extraction of three key attributes of implementation of a potential merger and acquisition process as an important tool of business sustainability—aims, concerns, and reasons. This paper further presents the basic parameters of the Attributes of Future Mergers and Acquisitions (AFM&A) methodology: eigenvalues, Cronbach’s alpha values, the percentage of the variance explained, inter-correlations of the extracted factors, and the results of an analysis of differences in the assessment of the extracted factors by managers. At the same time, no statistically significant differences were found in the assessment of the extracted merger and acquisition assessment factors. The study fills in the research gap in the area by identifying and specifying the attributes of considering the future implementation of M&A management in terms of the broader concept of this issue.

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