Asset versus equity acquisitions by financial institutions

Brodmann, Jennifer, Danso, Charles Armah, Jory, Surendranath Rakesh and Ngo, Thanh (2024) Asset versus equity acquisitions by financial institutions. Journal of Financial Research, 1-37. (doi:10.1111/jfir.12415).

Record type: Article

Abstract

We examine the impact of asset versus equity acquisitions in generating firm value for financial institutions. We find that acquirers experience statistically and economically significantly higher cumulative abnormal returns in asset acquisitions compared to equity acquisitions. We analyze the announcement-period returns and find that investors' reaction to asset acquisitions by financial institutions is met more favorably than are equity acquisitions. When employing the difference-in-differences approach, we find that asset acquisitions entail improved operating performance.

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In preparation date: 10 January 2024

Accepted/In Press date: 10 January 2024

e-pub ahead of print date: 16 June 2024

Published date: 16 June 2024

Additional Information: Publisher Copyright: © 2024 The Author(s). Journal of Financial Research published by Wiley Periodicals LLC on behalf of The Southern Finance Association and the Southwestern Finance Association.