Integration strategies evaluation : a comparative study of single-and multi-level strategies : the case of US-based bank mergers

Other Title(s)

دراسة تحليلية مقارنة لاستراتيجيات الدمج و الاقتناء أحادية المستوى و متعددة المستويات من حيث القيمة المضافة و الكفاءة : دراسة حالة على اندماجات البنوك الأمريكية

Dissertant

Ali, Jarir Mahmud

Thesis advisor

Abd Allah, Khalid Amin

Comitee Members

Hamdun, Talal
al-Aaraj, Adnan
Khaddash, Husam al-Din

University

Arab Academy for Financial and Banking Sciences

Faculty

The Faculty of Banking and Financial Sciences

Department

Department of Banking

University Country

Jordan

Degree

Master

Degree Date

2005

English Abstract

The banking industry has experienced an extraordinary level of consolidation during the past two decades, on a belief that gains can accrue through expense reduction, increased market power, reduced earnings volatility, scale and scope of economies.

Two major theories were developed to study the scope of mergers and acquisitions, namely the single-level integration strategy that was adopted in traditional mergers during the eighties, and the multi-level integration strategy that evolved during the early nineties.

A review of the literature suggested that the value gains that are alleged with the new multi-level integration approach have not been practically verified.

The dissertation then sought to address alternative explanations and reconcile the data with continued merger activity.

In general, the researcher found that these explanations were rationalized for the non-existence of positive value outcomes, non-alternative and testable theories.

Though a new thread of the literature had developed during the late nineties which seek to understand individual cases by looking into the process of change for a particular merger, none of these approaches had attempted to practically test efficiency effects of new merger integration strategies in order to develop a solid base for comparison and further study.

Accordingly, the researcher estimated the cost, standard profit and alternative profit efficiency effects of bank mergers of the 1990s in order to evaluate multi-level integration strategies in comparison to single-level integrations already presented in previous literature of the eighties.

The data suggested that on average, bank mergers increase profit efficiency relative to other banks, but have little effect on cost efficiency.

Efficiency gains are much more evident when the participating banks are relatively i inefficient e x a net, c consistent w it hypothesis that mergers may "alert" inefficient management or are used as an excuse to implement unpleasant restructuring.

The data suggested that part of the efficiency gains result from improved diversification of risks, which may a How consolidated banks to shift their output mixes from securities towards loans, raising expected revenues.

Main Subjects

Financial and Accounting Sciences

Topics

• Banks
• Management
• Corporate mergers
• United States
• Banking

No. of Pages

118

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-304733