and above the normal charge-offs. This paper examines the risk associated with post-merger variability in the charge … the years following the merger. The paper finds that the combined loan portfolios of merging BHCs have higher than average … levels of charge-offs and higher than average risk in their portfolios in the year prior to the merger. Using the new measure …

The practice of merger arbitrage is one of the more popular and profitable strategies employed by many hedge funds. At … its core, the strategy is one that earns an excess return for the assumption of a specified risk. Merger arbs purchase … usually trade some measure below the agreed-upon merger price, due to the risk that the merger might not actually occur. If …