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, under-researched. 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 state-owned 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.

State-Owned Banks: Acquirers in M&A deals / E. Bacchiocchi, M. Ferrari, M. Florio, D. Vandone. - [s.l] : Ciriec, 2015 Jun. (WORKING PAPER CIRIEC ...)

State-Owned Banks: Acquirers in M&A deals

E. Bacchiocchi;M. Florio;D. Vandone
2015-06

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, under-researched. 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 state-owned 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.
Inefficient Management Hypothesis; Mergers & Acquisitions; State-owned banks; Ownership
Settore SECS-P/03 - Scienza delle Finanze
https://ideas.repec.org/p/mil/wpdepa/2015-08.html
Working Paper
State-Owned Banks: Acquirers in M&A deals / E. Bacchiocchi, M. Ferrari, M. Florio, D. Vandone. - [s.l] : Ciriec, 2015 Jun. (WORKING PAPER CIRIEC ...)
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/2434/611853
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