An application of Meisel's framework in evaluating mergers/acquisitions success in selected publicly-listed banks from 1999-2007

Date of Publication

2009

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Commerce Major in Management of Financial Institutions

Subject Categories

Finance and Financial Management

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management

Thesis Adviser

Eleonor S. Salumbre

Defense Panel Member

Rene B. Hapitan
Neriza M. Delfino

Abstract/Summary

The 1997 Asian financial crisis brought forth a surge of mergers and acquisitions (M&A) in the Philippine financial sector. Commercial banks either, (i) merged with other commercial banks and/or (ii) acquired rural and thrift banks from 1999 to 2007.

Although there are literatures on evaluating the success of similar M&As in other economies, there is very limited published research on the standard methodology in evaluating bank M&As in the Philippines.

Based on Scott I. Meisel's methodologies in his research that measured the probability that a bank merger will occur, this current research evaluated the level of success among publicly-listed, Philippine banks that underwent an M&A transaction from 1999 to 2007. The respective banks' profitability, size, asset management, and solvency ratios were used as measures in evaluating the success level of the M&A transaction. Applying these measurements in a t-8 (Pre-merger) and t+8 (post-merger) quarterly timeframe, whereas t=0 is the quater of closing, a rubric was used to determine how successful the M&A transaction became.

The research included the following banks as subject for evaluation Bank of the Philippine Islands, Metropolitan Bank and Trust Co., Export and Industry Bank, Union Bank of the Philippines, Banco de Oro Unibank, Security Bank, and Philippine Bank Communications.

The results of the evaluation showed differing success levels. Some results showed unexpected trends in the banks' profitability, asset management, and solvency throughout the 17 quarter-period of evaluation. However, although most of the evaluation results showed success, the researchers recommend that the future studies consider not only the financial aspect of the M&A transaction, but also the management side of it for a richer discussion on the topic.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU21181

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

99, [21] leaves : illustrations

Keywords

Banks and banking--Philippines; Consolidation and merger of corporations--Philippines

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