Home Search Sitemap Contact Bookmark

Free Dissertations - Finance Dissertations

28, No.3 Pp. 294-310. Ramaswamy, K, 1996, ‘performance Changes And ...

28, No.3 pp. 294-310.
Ramaswamy, K, 1996, ‘Performance Changes and Shareholder Wealth Creation Associated with Mergers of Publicly Traded Banking Institutions', Journal of Money, Credit and Banking, Vol. 40, No. 3, pp. 697-715.
Scherer F.M., 1980, Industrial Market Structure and Economic Performance, Rand McNally, Chicago, Illinois.
Souder W.E. & Chakrabarti A.K., July-August 1984, Interfaces 14, The Institute of Management Sciences, pp. 41-47.
Sudarsanam S. Creating Value from Mergers and Acquisitions: The Challenges (FT Prentice Hall, 2003)
Vennet V.R., The Effect of M&As on the Efficiency and Profitability of EC Credit Institutions. Journal of Banking and Finance 20, 1996, pp. 1531-58
Warner J., Templeman J. & Horn R., The World Is Not Always Your Oyster, Business Week, October 30, 1995, pp. 132-34
(11)Conclusions
Rapid progress within the IT field AND financial deregulation has made it possible for cross-border mergers between banks in different countries.
Academic writers are puzzled as to the motives and gains of such M&A activity.
Cross-border mergers are complicated. This complexity highlights the need for a more detailed study of a strategic kind as to why banks should pursue M&A activities.
The MeritaNordbanken merger can be described as an offensive merger with the strategic aim of management to create growth rather than cut costs.
The balanced scorecard approach may be seen as an example of a detailed study approach to analyse the strategic fit between merging banks. It organises and structures financial and non-financial objectives as well as other aspects of the merger in accordance with the underlying strategy and vision.
The key strategy appears to be sharing and cross-utilising each bank's differences. Nordbanken was classed as a retail orientated mass-market bank whereas Merita was mainly seen as a corporate bank, focused on affluent private customers. Hence the opportunity is to cross sell each bank's products and services AND reduce macroeconomic risk.
Thus Cross-Selling may certainly be regarded as a success factor in cross-border mergers (Nellis, McCaffery and Hutchinson, 2000)
There are several similarities that are worth noting:
Both have large domestic market shares and national distribution networks
Top management share a vision of European banking
Both went through major restructuring and hence are not new to changes
The success of a merger, in the case of Nordbanken-Merita, depends on the capability of cross-utilising the different characteristics and strengths of the merging banks.
Perhaps the answer is to look for dissimilarities rather than similarities between the banking businesses. The balanced scorecard analysis may be used in order to highlight such areas of difference.
(Banning, 1999)
Manager controlled and larger banking firms are more likely to acquire out-of-market banks.


Thanks