Determinants of cross-border M&A success in the Russian banking sector

Abstract

The Russian banking sector provides an example of a new, but rapidly developing market which has experienced a significant number of mergers and acquisitions over the last decade. The goal of the study is to find how the determinants of M&A success impact post-M&A financial performance of the target institution, operating in Russia. The goal is achieved through fulfillment of several tasks, in particular determinants of post-merger financial performance are found, most appropriate indicator of M&A success in Russian banking sector is revealed. In this research 26 cross-border acquisitions, announced in Russia between January 1, 2002 and December 31, 2009 are analyzed. The results support the hypotheses that the return on equity of the domestic target banks depends on relative size of the acquirer and the target and profitability of both acquirer and the target. However, the volume of the deal and the acquired share do not have significant impact on the investigated variable.