DP14663 Value creating mergers â?? British bank consolidation, 1885-1925
| Author(s): | Fabio Braggion, Narly Dwarkasing, Lyndon Moore |
| Publication Date: | April 2020 |
| Keyword(s): | Banking, Great Britain, mergers and acquisitions |
| JEL(s): | G34, N23, N24 |
| Programme Areas: | Economic History |
| Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=14663 |
The British banking sector had many small banks in the mid-nineteenth century. From around 1885 until the end of World War One there was a process of increasingly larger mergers between banks. By the end of the merger wave the English and Welsh market was highly concentrated, with only five major banks. News of a merger brought a persistent rise in the share prices of both the acquiring and the target bank (roughly 1% and 7%, respectively). Non-merging banks, especially those whose local market concentration rose as a result of the merger, saw their stock prices rise.