Title: The role of timing at Mergers and Acquisitions in the banking industry

Authors: Luisa Mueller, Dirk Schiereck

Addresses: Institute of Business Administration, Tech University Darmstadt, Hochschulstrasse 1, 64289 Darmstadt, Germany. ' Institute of Business Administration, Tech University Darmstadt, Hochschulstrasse 1, 64289 Darmstadt, Germany

Abstract: We identify 72 bank Mergers and Acquisitions (M&As), in which US banks acquired other financial institutions. We focus on the role of timing at M&A in the context of boom phase and financial crisis. Applying event study methodology, we examine: value generation to bank shareholders; value implications on bank shareholders according to rival banks| M&A considering whether transactions are undertaken prior to or during crisis. Since we identify JPMorgan Chase & Co. as crisis winner, we compare its returns with the results of competitors. The findings partially confirm our hypotheses that a well-performing bank creates value through M&A.

Keywords: M&A; mergers and acquisitions; bank mergers; event study; subprime mortgages; financial crisis; banking industry; value generation; US banks; USA; United States; value creation; subprime crisis.

DOI: 10.1504/IJMEF.2011.038268

International Journal of Monetary Economics and Finance, 2011 Vol.4 No.1, pp.49 - 76

Published online: 25 Jan 2011 *

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