Vallascas, Francesco; Hagendorff, Jens - In: Journal of Banking & Finance 35 (2011) 4, pp. 902-915
We analyze the implications of European bank consolidation on the default risk of acquiring banks. For a sample of 134 bidding banks, we employ the Merton distance to default model to show that, on average, bank mergers are risk neutral. However, for relatively safe banks, mergers generate a...