This dissertation examines the wealth effects of bank mergers on bidder, target, and combined firm shareholders for a sample of 785 mergers during the period 1980-2000. The dissertation employs two unique bank event study methodologies to calculate abnormal returns for bidder, target and combined firms. The first methodology is a modified market model that controls for shocks common to the banking industry. The second is an EGARCH (1,1) model that adjusts for the violated regression assumptions of the traditional market model event study. Namely, it controls for the linearity assumption, heteroskedasticity, and the correlation in the error term. The results of both methodologies reveal that target shareholders enjoy significantly positive abnormal returns, whereas the bidder shareholders experience significantly negative abnormal returns. Overall, announcements of bank mergers generate positive wealth effects for the combined shareholders. However, the evidence presented in this dissertation, to some extent, underscores the importance of the choice of models describing stock returns in examining the impact of bank mergers. In addition, when mergers are analyzed to determine the effects of relative size and relative book-to-market values, we find evidence that the relative size significantly affects the target, bidder and combined firm return; method of payment is also found to be significant in abnormal returns. Moreover, we find that the number of bidders affects only the bidder returns, while book-tomarket values are irrelevant factors. Availability Restricted: Release the entire work for campu

Thesis (Ph. D.)--Ohio State University, 1978. / Includes vita. Includes bibliographical references (leaves 221-227). Available online via OhioLINK's ETD Center.

Herdecke, PrivatUniversiẗat, 2002--Witten.

The number of domestic and cross border bank mergers and acquisitions (M&A) has increased over the last decade with a resultant impact on the bank dividend. This study examines the effect of M&A on the dividend policy by comparing the abnormal returns, profitability and dividend policy of the domestic and cross border bank acquirers. The study focused on EU mega-bank mergers and acquisitions within 1997-2007 involving only commercial-to-commercial banks. The sample consists of a total of 62 mega-M&A with a minimum deal value of €500 million. Three hypotheses were formulated specifically to test: (i) the wealth effect and geographical diversification of the M&A between domestic and cross border acquirers; (ii) the effect on in the financial performance of both acquirers and (iii) the M&A impact on dividend policy on banks after bank M&A. Two strands of the literature were reviewed focusing on M&A and dividend policy. The event study methodology was used to calculate the abnormal returns of both the domestic and cross border acquirers which were standardised. A long window of 61 days was applied to capture a satisfactory length of pre and post merger events that could capture the behaviour of the abnormal returns and consequent effect on dividend policy. The hierarchical regression model was used to estimate the impact of the variables on the profitability and dividend policy of the acquirer banks. In comparison with the domestic acquirers, the cross border abnormal returns showed a trend of significant negative results following the M&A announcement. The domestic acquirers showed no significance but, on average have higher cumulative total standardised abnormal returns (CTSAR) than the cross border acquired banks. The result of the financial performance showed that CTSAR of the cross border acquirers is significantly affected by the profitability of the banks but insignificant with domestic acquirers. However, the cost-to –income ratio (CIR) significantly affects the performance of both bank acquirers. CIR and RISK (measured by the ratio of the loan provision to net interest revenue of the banks) highly correlated with profitability of both the domestic and cross border acquirers. The management of costs and loans risks were found to be significant variables in the achievement of profitability among domestic acquirers. The dividend policy hypothesis result indicated that CTSAR has a weak correlation and insignificant effect on the dividend policy variables. Infact, the Causality test result confirmed that the CTSAR does not Granger cause dividend policy. However, the study provides strong support to previous studies that beta, liquidity, taxes, and the finance structure of the acquirers are significant variables in the formulation of the dividend policy of the merged banks. The beta, which a proxy for risk, is the most significant factor affecting the dividend policy of the merged banks.

This study examines the short-term shareholder wealth effects to U.S. bank mergers and acquisitions (M&As) that were announced and completed between 1989 and 2004. Using various event windows, the cumulative abnormal returns (CARs) to target firms are positive, bidder firm abnormal returns are negative, and the combined CARs are positive. This result is consistent with the synergy and hubris hypothesis wherein bank M&As are wealth-creating events as synergies exist; however, bidders may overpay to realize these gains. <p>The M&As are examined by the method with which they are financed, namely, cash, or a combination of cash, stock, and/or debt, versus stock only. The target, bidder and combined mean CARs for M&As that are financed by a cash or combination payment are higher than those that are financed by stock for the full sample period and the 1999 2003 sub-sample period. Furthermore, the results indicate a positive and statistically significant relationship between the bidder and combined CARs and cash or combination payments. <p>Further evidence presented suggests a positive and statistically significant relationship between the target CARs and whether the M&A is geographically focusing (intrastate), with no corresponding relationship existing for the bidder and combined firms. Results, however, do indicate that the mean combined CARs are higher for intrastate compared to interstate M&As. In addition, the target, bidder and combined CARs are driven in part by the relative size of the merger parties.

This study examines the short-term shareholder wealth effects to U.S. bank mergers and acquisitions (M&As) that were announced and completed between 1989 and 2004. Using various event windows, the cumulative abnormal returns (CARs) to target firms are positive, bidder firm abnormal returns are negative, and the combined CARs are positive. This result is consistent with the synergy and hubris hypothesis wherein bank M&As are wealth-creating events as synergies exist; however, bidders may overpay to realize these gains. <p>The M&As are examined by the method with which they are financed, namely, cash, or a combination of cash, stock, and/or debt, versus stock only. The target, bidder and combined mean CARs for M&As that are financed by a cash or combination payment are higher than those that are financed by stock for the full sample period and the 1999 2003 sub-sample period. Furthermore, the results indicate a positive and statistically significant relationship between the bidder and combined CARs and cash or combination payments. <p>Further evidence presented suggests a positive and statistically significant relationship between the target CARs and whether the M&A is geographically focusing (intrastate), with no corresponding relationship existing for the bidder and combined firms. Results, however, do indicate that the mean combined CARs are higher for intrastate compared to interstate M&As. In addition, the target, bidder and combined CARs are driven in part by the relative size of the merger parties.

University, Diss., 2006--Frankfurt (Main).

Master-Arbeit Univ. St. Gallen, 2008.

Thesis (Ph. D.)--Ohio State University, 2005. / Title from first page of PDF file. Document formatted into pages; contains xv, 241 p.; also includes graphics. Includes bibliographical references (p. 195-201). Available online via OhioLINK's ETD Center

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