Debtholder Wealth Effects in Mergers and Acquisitions: Evidence from the CDS Market

2018 ◽  
Author(s):  
Kai Huettermann ◽  
Denisa Lleshaj
Keyword(s):  
Mergers And Acquisitions ◽  
Wealth Effects

Bank mergers and acquisitions in Greece: the financial crisis and its effect on shareholder wealth

2019 ◽  
Vol 16 (2) ◽  
pp. 273-296 ◽  
Author(s):  
Ioannis Tampakoudis ◽  
Michail Nerantzidis ◽  
Demetres Subeniotis ◽  
Apostolos Soutsas ◽  
Nikolaos Kiosses
Keyword(s):  
Financial Crisis ◽  
Mergers And Acquisitions ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Shareholder Wealth ◽  
Conclusive Evidence ◽  
Wealth Effects ◽  
Bank Mergers ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to investigate the wealth implications of bank mergers and acquisitions (M&As) in the unique Greek setting given the triple crisis phenomenon – banking, sovereign debt and economic crises – that prevailed after the global financial crisis. Design/methodology/approach The study examines bank M&As and bank transactions over the period from 1997 to 2018, as well as government-assisted M&As during the crisis. The wealth effects of bank M&As are assessed using both univariate and multivariate frameworks. Findings Findings show a neutral crisis effect on the valuation of M&As upon their announcement. However, the authors provide conclusive evidence that M&A completions are value-destroying events for acquiring banks during the crisis, far worse than in the pre-crisis period. Greek banks also fail to create value from government-assisted mergers. The results suggest that the financial stability and the prevention of further deepening of the Greek crisis with possible contagion effects were achieved at the expense of shareholders and taxpayers. Originality/value To the authors’ knowledge, this is the first study that examines the impact of the Greek triple crisis on the wealth effects of bank M&As and bank transactions. Also, the study provides first evidence with regard to the economic impact of government-assisted M&As in the European context.

The effect of corporate governance mechanisms on European Mergers and Acquisitions

2018 ◽  
Vol 18 (5) ◽  
pp. 965-986 ◽  
Author(s):  
Ioannis Tampakoudis ◽  
Michail Nerantzidis ◽  
Demetres Soubeniotis ◽  
Apostolos Soutsas
Keyword(s):  
Corporate Governance ◽  
Mergers And Acquisitions ◽  
Economic Impact ◽  
Abnormal Returns ◽  
Voting Rights ◽  
Shareholder Wealth ◽  
Wealth Effects ◽  
Board Size ◽  
Content Type ◽  
Acquiring Firms

Purpose The purpose of this study is twofold: First, to assess the economic impact of Mergers and Acquisitions (M&As) on European acquiring firms from the beginning of the sixth merger wave onward. And second, to investigate the effect of CG mechanisms such as board size, voting rights and anti-takeover provisions (ATPs) on acquirers’ gains, along with a set of control variables. Design/methodology/approach For the purpose of the study, the authors use a sample of 349 completed M&As across all business sectors between European firms from 01/01/2003 to 31/12/2017. Abnormal returns are estimated by applying an event study methodology, and the effects of CG mechanisms are assessed with univariate and multivariate cross-sectional regressions. Findings The authors present evidence that acquirers realize significant positive excess returns upon the announcement of M&As. The authors find past profitability to be a strong indicator of value creation, while most of the traditional firm-specific and deal variables fail to interpret the results. The authors’ analysis indicates that the examined CG measures have a significant effect on acquirer’s gains. More specifically, the authors find that boards in excess of eight directors are negatively related to announcement-period abnormal returns. In contrast, the wealth effects for acquiring firms are positively related to shareholders’ voting rights and/or to the number of ATPs. The estimated coefficients of all three CG mechanisms are statistically significant across alternative model specifications. Research limitations/implications A clear implication is that the existence of certain CG mechanisms leads to value-enhancing strategic decisions for European acquirers. In terms of policy direction, the authors’ findings assist practitioners and/or national and transnational institutions in perceiving the efficacy of certain CG practices. Practical implications This study indicates that Corporate Governance Statements (CGSs) fail to provide adequate information to investors to understand in-depth the CG mechanisms that companies apply. Thus, the authors recommend that CGSs should provide not only narrative information but also information that may generate value for shareholders and other stakeholders as well. Such information should be qualitative and/or quantitative in nature and be made available to market participants to support their decision-making. Originality/value To the authors knowledge, this is the first study that investigates the effect of CG on the economic impact of M&As for European acquirers, using three widely examined CG mechanisms, namely, the board size, the voting rights and the ATPs. The authors’ empirical findings form the basis for further examination of the linkage between M&As and CG, with the intention of establishing the appropriate CG framework that will ensure shareholder wealth creation. This line of research could produce new insights in the field, allowing investors and policymakers to appreciate the benefits of effective CG.

The Mystique of the Boutiques: The Wealth Effects of Boutique Banks in Mergers and Acquisitions

2020 ◽  
Author(s):  
Samer Adra ◽  
Leonidas Barbopoulos ◽  
Elie Menassa
Keyword(s):  
Mergers And Acquisitions ◽  
Wealth Effects

Wealth effects and financial performance of cross-border mergers and acquisitions in five East Asian countries

2011 ◽  
Vol 2 (3) ◽  
pp. 219 ◽  
Author(s):  
Saw Imm Song ◽  
Dorothy Chiok Choo Kueh ◽  
Rashidah Abdul Rahman ◽  
Ei Yet Chu
Keyword(s):  
Mergers And Acquisitions ◽  
Financial Performance ◽  
East Asian ◽  
Wealth Effects ◽  
Asian Countries ◽  
Cross Border

Do Mergers and Acquisitions Create Wealth Effects? Evidence from Twenty Emerging Markets

2015 ◽  
Vol 53 (6) ◽  
pp. 529-550 ◽  
Author(s):  
Evren Arık ◽  
Ali M. Kutan
Keyword(s):  
Mergers And Acquisitions ◽  
Emerging Markets ◽  
Wealth Effects

Investment bank reputation and shareholder wealth effects in mergers and acquisitions

2009 ◽  
Vol 23 (3) ◽  
pp. 257-273 ◽  
Author(s):  
Dirk Schiereck ◽  
Christof Sigl-Grüb ◽  
Jan Unverhau
Keyword(s):  
Mergers And Acquisitions ◽  
Shareholder Wealth ◽  
Wealth Effects ◽  
Investment Bank

scholarly journals Wealth effects of business takeover announcements: The case of Australian acquirers’ shareholders

2010 ◽  
Vol 8 (1) ◽  
pp. 758-771
Author(s):  
Shrimal Perera ◽  
Jayasinghe Wickramanayake ◽  
Ankit Mehta
Keyword(s):  
Mergers And Acquisitions ◽  
Abnormal Returns ◽  
Wealth Effect ◽  
Wealth Effects ◽  
Asia Pacific ◽  
Pacific Region ◽  
Asia Pacific Region ◽  
Cross Border ◽  
Short Horizon

Australia has accounted for over 51 percent of mergers and acquisitions in the Asia Pacific region (excluding Japan) during 2004-2006. This paper investigates the short-horizon and long-horizon wealth effects experienced by shareholders of Australian acquirers following these domestic and cross-border business takeover announcements. The sample consists of 197 announcements. Results for domestic acquisitions suggest that acquirers’ shareholders endure abnormal returns in the range of -1.07% and -1.86% per day in the short-horizon. The long-horizon wealth effects, however, were found to be inconclusive. Results for cross-border acquisitions show that acquirers’ shareholders endure abnormal returns in the range of 1.02% and 1.26% per day in the short-horizon. This positive wealth effect, however, dissipates in the long-horizon.

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