Impact of mergers and acquisitions in financial sector on bidder’s returns in emerging capital markets

Abstract

Authors: Alina Y. Grinchenko alinagrinchenko@gmail.com

Svetlana A. Grigorieva National Research University The Higher School of Economics grigorievasa@mail.ru

The performance of M&A deals in financial sector is the actual topic in financial academic literature for many years. Most existing studies examine the performance of M&A deals in developed countries. We contribute to existing literature by examining the impact of mergers and acquisitions on bidder’s value in emerging BRICS countries over 2000-2012. In contrast to existing studies we analyse the latest period and examine the impact of the economic crisis of 2008-2009 on the performance of M&A. Based on the sample of 264 deals we find that mergers and acquisitions do not destroy shareholder’s value. We also find that the main determinants of M&A performance are method of payment, deal size, number of previous acquisitions made by the acquirer prior to the current transaction, acquirer’s intellectual capital and the difference in countries development.