State-Owned Banks: Acquirers in M&A Deals

33 Pages Posted: 27 Jan 2016

See all articles by Emanuele Bacchiocchi

Emanuele Bacchiocchi

Università degli Studi di Milano

Matteo Ferrari

University of Milan

Massimo Florio

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM)

Daniela Vandone

University of Milan

Date Written: June 20, 2015

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.

Keywords: Inefficient Management Hypothesis; Mergers & Acquisitions; State-owned banks; Ownership

JEL Classification: G32, G34, L32.

Suggested Citation

Bacchiocchi, Emanuele and Ferrari, Matteo and Florio, Massimo and Vandone, Daniela, State-Owned Banks: Acquirers in M&A Deals (June 20, 2015). Available at SSRN: https://ssrn.com/abstract=2722473 or http://dx.doi.org/10.2139/ssrn.2722473

Emanuele Bacchiocchi

Università degli Studi di Milano ( email )

Milan, 20122
Italy

Matteo Ferrari

University of Milan ( email )

Via Festa del Perdono, 7
Milan, 20122
Italy

Massimo Florio (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

Via Conservatorio 7
I-20122 Milano, 20122
Italy
+39 02 50321510 (Phone)
+39 02 50321505 (Fax)

HOME PAGE: http://www.demm.unimi.it/ecm/home

Daniela Vandone

University of Milan ( email )

Via Festa del Perdono, 7
Milan, 20122
Italy

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