Sullivan & Cromwell Discusses “Day One” Market Reactions to Bank Mergers
There has recently been a pick-up in bank merger and acquisition activity that likely reflects both the increased importance of scale in the banking industry, particularly in the technology area, and regulatory and legislative developments that reduce certain obstacles to approval of bank merger transactions. Nonetheless, the immediate negative market reaction that has greeted the announcement of several recent mergers may discourage other banks from considering sensible consolidation transactions. Not only purchasers, but sellers, may be reluctant to engage in transactions, notwithstanding their strong business and financial merits, if concerns over the “day-one” market reaction play an outsized role in … Read more