Why Are They Only Slowly Picking Up? Low level of Cross Border Mergers and Acquisitions in EU Banking Sector
|Author:||Mgr. Vojtěch Kačena|
|Year:||2007 - summer|
|Leaders:|| prof. Ing. Michal Mejstřík CSc.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:|
|Abstract:||Within last decades, significant measures have been taken to create an integrated market for financial institutions as it is widely acknowledged that this leads to the ultimate goal of the European Union, creating a Single European Market. However a unprecedented wave of mergers and acquisitions (M&As) in the 1990s, had primarily of domestic nature. Hence, this thesis attempts to uncover which factors caused low cross-border activity. The first two parts of this thesis examine the macro-level, concluding that national interests and a fragmented supervisory infrastructure held financial integration back. The third part of the thesis looks at the micro-level, analyzing the ex-ante and ex-post stage of M&As. It concludes that firms seem to favor domestic transactions because synergies are more obvious and easier to extract, the fragmentation of Europe’s financial industry offers substantial opportunities in the home markets, and attempting to grow to a size also needs to be accomplished in one (domestic) market. The last part of the thesis studies two cases of recent cross-border M&As, respectively Nordea and HSBC|