European banks’ mergers and acquisitions: Rank value vs value of cash after the COVID-19 pandemic

Download This Article

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Mergers and acquisitions (M&As) deals are one of the most important bank strategies that can change the bank’s value and market share by achieving economies of scale. This paper studies mega M&As among European banks in 2023 and also examines how important is a number of crucial banking financial factors on the rank value including net debt and on value of cash in banks’ M&As. This study aims to see if there is any influence first on rank value including net debt and second on the value of cash from the selected important financial banking ratios to explain M&As. The findings show that there is a statistically significant and similar correlation between the selected financial ratios and the rank value including net debt and the value of cash. The original contribution of this paper lies in the fact that for the first time after the COVID-19 pandemic, a study tries to find only for 2023, the existence of this correlation with two separate regression models to help bidder banks avoid the irrational acquisitions. Thus, the acquiring banks probably will be protected from financial failed future acquisitions.

Keywords: Mergers and Acquisitions, Investments, Banks

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: G11, G21, G34

Received: 15.02.2024
Accepted: 31.05.2024
Published online: 05.06.2024

How to cite this paper: Kyriazopoulos, G. (2024). European banks’ mergers and acquisitions: Rank value vs value of cash after the COVID-19 pandemic. Risk Governance and Control: Financial Markets & Institutions, 14(2), 88–98. https://doi.org/10.22495/rgcv14i2p9