Article ID Journal Published Year Pages File Type
1003182 Research in International Business and Finance 2011 9 Pages PDF
Abstract

This paper investigates the risk and wealth effects of 72 mergers and acquisitions between banks in Europe and insurance companies during the period 1989–2004. The empirical results indicate that acquirers’ total risks remain constant relative to the world, home market indices and home banking indices. There are no changes for the systematic risks (beta) with respect to the world market index or the home banking index. After removing world and home market indices effect, systematic risk against home banking index reduce significantly for domestic deals. In addition, positive wealth effects are documented. Two factors have contributed to the bidders’ cumulative abnormal returns (CARs): relative deal size and being a serial acquirer. Finally, change of beta shows negative relations with CARs.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
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