The banking sector in Europe is bound to change its shape soon. In many countries the banking sector is still highly fragmented, especially in Germany and Italy. EU Banks need to grow in size if they want to be able to compete globally with financial titans such as Citigroup. This study aims at analysing the key drivers and success factors for external growth via Mergers and Acquisitions (M&A) in the European banking sector. After explaining the theoretical background of Mergers and Acquisitions (Chapter 2), the study examines the current condition of the EU banking sector followed by a more detailed view on the main markets and players (Germany, UK, France, Spain, Italy) focussing on their potential role in a future consolidation process (Chapter 3). It seems that important obstacles for consolidation have been removed and banks may indeed engage in domestic and even cross border M&A. A detailed comparison of Europe’s largest banks will complement this section. By analysing paid premiums in the five key European economies, we will draw conclusions on the influence of market structure on the potential for consolidation. In Chapter 4, the Banco Sabadell - Banco Atlantico case is analysed and discussed as an example of a domestic bank merger. Emphasis is put on the logic behind the operation, performance measurement and its strategic impact. The question, if value has been created for shareholders as well as other stakeholders, will be addressed. This recent case (2004) only allows for a preliminary analysis of the success of the transaction, particularly in terms of achieved synergies versus expected synergies. The case evidences typical sources for higher synergies in domestic M&A but reveals also important sources of synergies that would apply in cross border operations. In the final conclusion (Chapter 5), the market analysis is put into perspective to recent developments and briefly compares it with the US Banking market. Key observations from the case study are summarized and finally this section aims at developing different scenarios for a future consolidation within the European banking sector.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Executive Summary
- Objectives of this study
- Hypotheses
- Data and Methodology
- Data
- Methodology
- Theoretical background – Literature Review
- Merger Terminology
- Types of M&A transactions
- Direction: Horizontal, Vertical and Conglomerate
- Mode: friendly or hostile
- Initiator: Vendor or Acquirer
- Type of payment: unlevered or levered
- Type of value transfer: share deal or asset deal
- Functional criteria
- Motivations for M&A – general and banking related
- General Motivations for M&A
- Motivations for M&A in the banking sector
- How to define M&A success? - 4 Perspectives
- Shareholder Perspective
- Consumer Perspective
- Employee Perspective
- Society Perspective
- Measuring success in bank related M&A transactions
- Event Studies
- Dynamical efficiency studies
- Performance studies
- Factors explaining M&A success in bank mergers
- Geographical focus
- Product/Activity focus
- Size of the target
- Growth focus of a transaction
- Risk reduction potential
- Profitability and cost efficiency of the target
- Capital market performance of the target prior to a transaction
- Experience of the acquiring bank
- Method of payment
- Post-merger Integration
- Problems arising in different phases of a bank M&A transaction
- European Banking sector
- EU Banking Market Structure
- Fragmentation
- Performance
- Spain: Banking sector overview
- Current situation
- Sector Performance
- Legal framework
- Fragmentation
- M&A activity
- Drivers and obstacles for further M&A activity in Spain
- UK: Banking sector overview
- Current situation
- Sector Performance
- Legal framework
- Fragmentation
- M&A activity
- Drivers and obstacles for further M&A activity in the UK
- France: Banking sector overview
- Current situation
- Sector Performance
- Legal framework
- Fragmentation
- M&A activity
- Drivers and obstacles for further M&A activity in France
- Italy: Banking sector overview
- Current situation
- Sector Performance
- Legal framework
- Fragmentation
- M&A activity
- Drivers and obstacles for further M&A activity in Italy
- Germany: Banking sector overview
- Current situation
- Sector Performance
- Legal framework
- Fragmentation
- M&A activity
- Drivers and obstacles for further M&A activity in Germany
- Analysis of M&A transactions in the EU Banking sector
- Domestic versus cross-border activity
- Silence before the storm?
- Four types of European M&A in the banking sector
- Premium Analysis
- EU Banking Market Structure
- Case study: Banco Sabadell's acquisition of Banco Atlantico
- Introduction
- Banco Sabadell: Corporate profile
- Product and regional focus
- Strategy
- A history of successful acquisitions
- Banco Atlantico: Corporate profile
- History
- Strategy, Product and regional focus
- Financial Analysis
- Transaction details
- Main acquisition facts
- Integration process
- Strategic motives for the transaction
- Time table
- Strategic fit
- Synergies
- Analysis of business units after the Atlantico acquisition
- Performance measurement and comparison
- Shareholder perspective: Abnormal return analysis
- Financial Ratio analysis
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This master thesis explores the drivers behind mergers and acquisitions (M&A) in the European banking sector. The study aims to understand the motivations for these transactions, analyze the success factors, and identify potential obstacles to consolidation in this industry.
- M&A activity in the European banking sector
- Motivations and drivers for M&A in the banking industry
- Factors influencing the success of bank mergers
- Obstacles to consolidation in the European banking sector
- Case study analysis of Banco Sabadell's acquisition of Banco Atlantico
Zusammenfassung der Kapitel (Chapter Summaries)
- The introduction sets the scene, outlining the objectives, hypotheses, and research methodology of the study. It also defines key terminology related to M&A and provides an overview of the data sources used.
- Chapter two delves into the theoretical background of mergers and acquisitions, exploring the various types of transactions, motivations for these deals, and methods for measuring success. It also outlines specific challenges and problems that can arise in different stages of bank M&A transactions.
- Chapter three focuses on the European banking sector, providing an analysis of the market structure, performance, and regulatory environment in key countries, including Spain, the UK, France, Italy, and Germany. It also examines the drivers and obstacles to further M&A activity in these regions.
- Chapter four presents a case study of Banco Sabadell's acquisition of Banco Atlantico. This in-depth analysis explores the strategic motives behind the transaction, the integration process, and the resulting performance of the combined entity.
Schlüsselwörter (Keywords)
This research focuses on mergers and acquisitions in the European banking sector. Key terms and concepts include: M&A motivations, M&A success factors, banking consolidation, cross-border acquisitions, event studies, performance analysis, regulatory framework, and case studies of specific banking transactions.
- Arbeit zitieren
- Daniel Wülbern (Autor:in), 2005, Mergers and Acquisitions in the European Banking Sector, München, GRIN Verlag, https://www.hausarbeiten.de/document/38800
