This article examines the primary motivation of the bank merger waves in the 1990s. Our investigation of the factors that determine bid premiums paid for target banks focuses on the importance of the financial characteristics of the targets, composition of their boards of directors, and the regulatory environment. The value of the target bank to the acquiring bank should reflect its present dis...

COMPANIES PURSUING MERGERS and acquisitions that raise potential antitrust issues typically obtain counsel on the likelihood of government investigations and enforcement actions. When it comes to assessing such risks, even businesses that only infrequently engage in M&A activity generally know the right questions to ask. In most instances, therefore, these issues are given appropriate advance c...

Compensation of bank CEOs increases after mergers, suggesting that executives may engage in acquisitions to enjoy size-related personal benefits (Bliss and Rosen, 2001). Alternatively, bank mergers can be viewed as the efficient assignation of merged assets to the managerial team best suited to realize merger gains. Theories of executive compensation based on managerial productivity and optimal...