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Essay / Research Paper Abstract
This 3 page paper is the summary of a research article published in 2008 examining the potential influences that impact on the different investor actions following the announcement of mergers or acquisitions between banks. The bibliography cites 1 source.
Page Count:
1 pages (~225 words per page)
File: TS14_TEbankEUUS.rtf
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Unformatted sample text from the term paper:
international boarders. However, it has been noted that there are different reaction of investors in different countries and that in many cases the return that are created for the investors
will be directly impacted by the level of investor protection that is present in the legal and regulatory environment of the target company. Protection has inherent costs which
impact on the potential returns and reduce the potential for abnormal returns. Banks play an important role in the merger and acquisitions markets, as providers of capital and financial
advice where mergers and acquisitions are taking place. The investors perceptions of the potential value of US bank mergers tends to be sceptical, in the US the investors of the
bank making a bid appear to make a loss of 2% following the announcement, whereas in the EU there appears to be no net impact on investment value when a
merger or acquisition announcement has been made, Hagendorff (et al, 2008) argue that the reason for the different investor reactions is the result of the different legislative and regulatory environment.
Previous research indicates that there is some support for this hypothesis with the regulatory environment constraining as well as potential; providing opportunities and the role that governance may
have on the way business is run and how bids are made an assessed, all of which may be associated with additional costs. Hagendorff (et al, 2008) study
the phenomena of bank mergers and acquisitions, taking data a sample of acquisitions were taken from the Thompson Financial M&A Database of bank mergers that took place in the US
and the EU between 1996 and 2004, with the proviso that the merger had been fully completed by 31st May 2005, was worth a minimum of $100 million1 and saw
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