TY - JOUR
T1 - Value creating mergers
T2 - British bank consolidation, 1885–1925
AU - Braggion, Fabio
AU - Dwarkasing, Narly
AU - Moore, Lyndon
N1 - Publisher Copyright:
© 2021 Elsevier Inc.
Copyright:
Copyright 2021 Elsevier B.V., All rights reserved.
PY - 2022/1
Y1 - 2022/1
N2 - The British banking sector had many small banks in the mid-nineteenth century. From around 1885 until the end of World War One there was a process of increasingly larger mergers between banks. By the end of the merger wave the English and Welsh market was highly concentrated, with only five major banks. News of a merger brought a persistent rise in the share prices of both the acquiring and the target bank (roughly 1% and 7%, respectively). Non-merging banks, especially those whose local market concentration rose because of the merger, saw their stock prices rise. Our findings suggest that the process of bank consolidation increased collusive behavior among merged banks, to the likely detriment of the consumer.
AB - The British banking sector had many small banks in the mid-nineteenth century. From around 1885 until the end of World War One there was a process of increasingly larger mergers between banks. By the end of the merger wave the English and Welsh market was highly concentrated, with only five major banks. News of a merger brought a persistent rise in the share prices of both the acquiring and the target bank (roughly 1% and 7%, respectively). Non-merging banks, especially those whose local market concentration rose because of the merger, saw their stock prices rise. Our findings suggest that the process of bank consolidation increased collusive behavior among merged banks, to the likely detriment of the consumer.
KW - Banking
KW - Great Britain
KW - Mergers and acquisitions
UR - http://www.scopus.com/inward/record.url?scp=85111558589&partnerID=8YFLogxK
U2 - 10.1016/j.eeh.2021.101422
DO - 10.1016/j.eeh.2021.101422
M3 - Article
AN - SCOPUS:85111558589
VL - 83
JO - Explorations in Economic History
JF - Explorations in Economic History
SN - 0014-4983
M1 - 101422
ER -