The difference in acquisition strategies of acquirers in the bankingsector and their abnormal returns pre-, mid-, and post-crisis: evidence from the world

Abstract: This study investigates whether different acquisition strategies provide dissimilar abnormal returns forthe bidders’ investors before, during and after the financial crisis. The study focuses on acquisitionsconducted by banks between 2004 and 2012. The data is split in a pre-, mid-, and post-crisis sample.The dataset consists out of 950 completed acquisitions conducted by 378 unique banks. Crosssectionalresults point out that investors are generally indifferent to which acquisition strategy is usedby banks, both at announcement and at completion. Moreover, it seems that investors do not reactfiercer to the announcement compared to the completion of a deal. The results are robust whensplitting the sample in acquirers originating from common- and code law countries. However, the studyfinds that opposed to what is suggested by prior research, shareholders from code law countries earnhigher returns than shareholders from common law countries.