What do bank acquirers want? Evidence from worldwide bank M&A targets

• Published in: Journal of banking & finance Vol. 36; no. 9; pp. 2641 - 2659
• Main Authors: Caiazza, Stefano, Clare, Andrew, Pozzolo, Alberto Franco
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.09.2012; Elsevier Sequoia S.A
• Subjects: Bank; Bank acquisitions & mergers; Bank internationalisation; Bankers; Banks; Countries; Cross border transactions; International banks; Internationalization; Investments abroad; M&A; Probability; Studies; Target company; G34; M&A; G15; Bank; Bank internationalisation; G21
• ISSN: 0378-4266; 1872-6372
• DOI: 10.1016/j.jbankfin.2012.06.004

► Are targets in cross-border bank M&As different from targets in domestic M&As? ► We answer this question studying over 24,000 banks from more than 100 countries. ► We include banks that were not involved in any M&A deal as a control sample. ► With few exceptions, domestic and foreign investors target similar banks. ► The main differences across M&A types are on the effect of country characteristics. What drives bankers to create larger and larger, often multinational banking groups? In this paper we investigate whether the targets in cross-border bank M&As are materially different from those banks targeted in domestic M&A deals. The main message of this paper is that, with few exceptions, domestic and foreign investors target similar banks. In particular, and contrary to what one might expect, bank size does not have a different effect on the probability of being a domestic or a cross-border target, instead it has a positive and highly significant effect in both cases. We find that the main differences between national and international M&As are the characteristics of the countries where the banks operate.