The wealth effect of banking merger announcements : an event study of the Nordic financial services industry
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- Master Thesis 
The purpose of this paper is to provide further empirical evidence on merger gains in the financial services industry. This is done by means of an “event study” of the Nordic market. The data sample underlying the analysis consists of 28 Nordic mergers in the period between 1999 and January 2006. The empirical analysis in this paper calculates excess returns of financial institutions around the merger announcement date within a 30-days event window. The findings support previous European research of Cybo-Ottone and Murgia (2000) who find support for the synergy hypothesis of M&A activity meaning that bidders and the combined entity experience positive cumulated abnormal returns, whereas the bidder’s CAAR are not significantly different from zero. In the empirical analysis, significant deviating merger gains between domestic vs. international, cross product vs. focused and shares- vs. cash-payment could not be found. This might be caused by the small data sample underlying the analysis. Further research is necessary to determine the success/failure of different merger drivers.