Banking Aquisitions: Acquirer and Target Shareholder Returns

This paper utilizes event study methodology to examine banking firms' returns in response to acquisition announcements. Acquirer and target returns are analyzed for acquisitions announced between 1979 and 1985. The abnormal returns of banking firms are similar to those of nonfinancial firms, except for the pre-announcement abnormal returns which are found for both acquirers and targets. Some differences are found between the return pattern of BHCs compared to the return pattern of banks.