The price of bank mergers in the 1990s
This article examines the primary motivations for the massive wave of bank mergers in
the U.S. during the 1990s by analyzing the prices paid for target banks. The authors find
that these prices reflect both general market and firm-specific characteristics. For
example, the lifting of regulatory restrictions on geographic markets for bank mergers
has a significant impact on the average price paid. Additionally, more profitable target
banks tend to command a significantly higher market price.
