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Title :The market reaction to bank mergers and acquisitions in Europe
Creator :Priovolou, Maria
Contributor :Leledakis, Georgios (Επιβλέπων καθηγητής)
Episcopos, Athanasios (Εξεταστής)
Chalamandris, Georgios (Εξεταστής)
Athens University of Economics and Business, Department of Accounting and Finance (Degree granting institution)
Type :Text
Extent :88p.
Language :en
Abstract :The purpose of the thesis is to study the stock price reaction due to merger and acquisition (M&A) announcement both target and acquiring banks in Europe for the period 1997-2016. the final sample is based on 84 transactions of acquiring banks and 52 transactions of target banks. Both acquires and targets included in the final sample were publicly listed, while in addition the M&A deals were completed and the acquirer owned a minimum of 51% of shares after the acquisition. A merger or an acquisition announcement is considered as an event. The results agree with the existing literature, indicating that the investors' reactions to merger and acquisition announcements create value for the shareholders of the target banks. In particular, the shareholders of target banks benefit from positive and significant abnormal returns, while the shareholders of acquiring banks are confronted with marginally positive and statistically not significant abnormal returns on the day of the announcement as well as negative returns during the period after the announcement. Additionally, in the present thesis, regression analysis using the least squares method (OLS) was performed in order to be investigated the factors influencing the value created for target banks. According to the results, the size, the geographical location, and the book to market ratio have a statistically significant effect on the cumulative abnormal returns of the target banks. This leads to the conclusion that mergers and acquisitions are more profitable for the shareholders of the target banks when they are small in size, have high book to market ratio and the transaction focuses on geographical diversification. For the other examined variables (Return of Assets (ROA), the Return on Equity (ROE), Earnings per Share (EPS)) there were no statistically significant results.
Subject :Mergers and acquisitions
Banking sector
Cumulative abnormal returns
Συγχωνεύσεις και εξαγορές
Τραπεζικός τομέας
Αθροιστικές υπεραποδόσεις
Date :31-10-2017
Licence :

File: Priovolou_2017.pdf

Type: application/pdf