Stockholder gains from focusing versus diversifying bank mergers

• 成果类型: Article
• 署名作者: DeLong, GL
• 署名单位: City University of New York (CUNY) System; Baruch College (CUNY)
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(00)00086-6
• 发表日期: 2001
• 页码: 221-252
• 关键词: banks; mergers; Market reaction

摘要

This paper shows bank mergers that enhance value upon announcement can be distinguished from those that do not create value. I classify mergers of banking firms according to activity and geographic similarity (focus) or dissimilarity (diversification), and examine the abnormal returns to each group as a result of the merger announcement. Mergers that focus both activity and geography enhance stockholder value by 3.0% while the other types do not create value. Analysis reveals that abnormal returns upon merger announcement increase in relative size of target to bidder, but decrease in the pre-merger performance of targets. (C). 2001 Elsevier Science S.A. All rights reserved. JEL classification: G14; G21; G34; L89.