Drivers of shareholder value creation in M&A: event study in the European banking sector in the post-financial crisis era

We investigate the factors driving shareholder value creation following extraordinary financial transactions in the European banking sector after the 2007-2008 crisis. We analyze a sample of transactions between commercial banks announced between 2010 and 2020, to verify whether these acquisitions resulted in the creation of value for acquirors. We find positive and statistically significant abnormal returns for the acquirors at the time of announcement. When identifying some aspects of the target that influence the returns, we test whether the market, in a period of crisis, recognizes a premium if the target is “good”. We find that the market valorizes target companies with low NPL ratios, high levels of capitalization with respect to the credit granted, and balanced exposure to interest rates.