Do Mergers and Acquisitions Increase Market Share and Financial Performance: Evidence from Two Deals in the US Banking Industry

Abstract

How does the difference in financing influence the M&As' effects on businesses in the banking industry? Case study method is applied to evaluate two deals, which are BB&T & SunTrust and KeyCorp & First Niagara Financial Group (one all-equity financed and one cash & equity financed). It is concluded that (1) the activity does increase market share, financial performance, and shareholders' abnormal return (2) financing does affect the impacts of M&As, as deals paid by cash & equity have a more remarkable improvement in financial performance and shareholders' return after M&A.