The corporate sector all over the world is restructuring its operations through different types  of  consolidation  strategies  like  mergers  and  acquisitions  in  order  to  face challenges  posed  by  the  new  pattern  of  globalization,  which  has  led  to  the  greater integration of national and international markets.. The intensity of cross-border operations recorded an unprecedented ...

Based on an unbalanced panel of all Bavarian cooperative banks for the years of 1989-97 which includes information on 283 mergers, we analyze motives and cost effects of small-scale mergers in German banking. Estimating a frontier cost function with a timevariable stochastic efficiency term we show that positive scale and scope effects from a merger arise only if the merged unit closes part of ...

The formation of elliptical galaxies as a result of the merging of spiral galaxies is discussed. We analyse a large set of numerical N-Body merger simulations which show that major mergers can in principle explain the observed isophotal fine structure of ellipticals and its correlation with kinematical properties. Equal-mass mergers lead to boxy, slowly rotating systems, unequal-mass mergers pr...

We numerically investigate chemodynamical evolution of interstellar medium (ISM) in gas-rich disk-disk galaxy mergers in order to explore the origin of fundamental chemical properties of halo ISM observed in elliptical galaxies. Main results obtained in this chemodynamical study are the following three. (1) Elliptical galaxies formed by gas-rich mergers show steep negative metallicity gradients...

N-body simulations of major spiral-spiral mergers with different mass ratios q = M1 : M2 ≤ 4 : 1 are presented. All mergers lead to spheroidal stellar systems with r1/4-like surface density profiles, resembling elliptical galaxies. The internal dynamical structure of the remnants does however depend critically on the adopted mass ratio. Equal-mass mergers with q ≤ 2 : 1 form radially anisotropi...

A widely publicized series of mergers has characterized the banking industry in recent years. Shareholder returns from these mergers have often been disappointing. This study finds delays in implementing potential operating savings and realizing benefits of scale economies may be one reason bank mergers have disappointing returns. We analyze a 200 branch network formed in a merger of four banks...

We consider the impact of horizontal mergers in the presence of free entry and exit. In contrast to much of the previous literature on horizontal mergers, our model yields predictions that seem intuitively reasonable: with only moderate cost synergies mergers of a small number of industry participants are beneficial (even under quantity competition), there is no “free rider problem” in that ins...

We study when and how pure non-horizontal mergers, whether cross-product or vertical, can deter new entry. Organizational mergers implicitly commit firms to more aggressive price competition. Because heightened competition deters entry, mergers can occur in equilibrium even when, absent entry considerations, they do not. We show that, in order to prevent a flood of entrants, mergers arise even ...

We study welfare effects of horizontal mergers under a successive oligopoly model and find that downstream mergers can increase welfare if they reduce input prices. The lower input price shifts some input production from costinefficient upstream firms to cost-efficient ones. Also, the lower input price makes upstream entry less attractive, reduces the number of upstream entrants, and decreases ...

Why Mergers Reduce Profits and Raise Share Prices — A Theory of Preemptive Mergers* by Sven-Olof Fridolfsson and Johan Stennek We explain the empirical puzzle why mergers reduce profits and raise share prices. If being an “insider” is better than being an “outsider,” firms may merge to preempt their partner merging with a rival. The stock-value of the insiders is increased, since the risk of be...