State-Owned Banks: Acquirers in M&A deals

Emanuele Bacchiocchi, Matteo Ferrari, Massimo Florio and Daniela Vandone ()
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Matteo Ferrari: Department of Economics, Management and Quantitative methods,University of Milan, Italy
Daniela Vandone: Department of Economics, Management and Quantitative methods,University of Milan, Italy

No 1508, CIRIEC Working Papers from CIRIEC - Université de Liège

Abstract: Between 2003 and 2013, according to Zephyr (BvD) data, 22% of M&A deals between banks have involved state-owned banks, either as targets (12%) or as acquirers (10%). The behavior of state-owned banks in the market control is, however, underresearched.The standard Inefficient Management Hypothesis suggests that more efficient managerial teams target less performing firms. The IMH, however, has never been tested for deals involving state-owned banks, nor the pre-deal operating characteristics of state-owned banks involved as acquirers in M&A deals. We build up a unique dataset of 3,682 deals between banks that allows us to classify M&As into four categories, depending on the ownership of the acquirer and the target: 1) public re-organization (deals between two state-owned banks), 2) publicization (a stateowned bank acquiring a private bank), 3) privatization and 4) private re-organization (deals between two private banks). Our findings confirms for the first time the IMH also for state-owned banks. We also find that state-owned banks active as acquirers in the market for corporate control have a better pre-deal performance compared to the private benchmark; this evidence is stronger for development banks.

Keywords: Inefficient Management Hypothesis; Mergers & Acquisitions; State-owned banks; Ownership (search for similar items in EconPapers)
JEL-codes: G32 G34 L32 (search for similar items in EconPapers)
Date: 2015-08
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-com
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Working Paper: State-Owned Banks: Acquirers in M&A deals (2015)
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