[Effect of Domestic and Cross-Border Acquisitions on UK Bank Shareholder Wealth]

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ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University

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ABSTRACT

In this study we try to explore the concept of domestic and cross-border acquisitions in a holistic context. The main focus of the research is on domestic and cross-border acquisitions and its relation with UK bank shareholder wealth. The research also analyzes many aspects of domestic and cross-border acquisitions and tries to gauge its effect on UK bank shareholder wealth. Finally the research describes various factors which are responsible for effect of domestic and cross-border acquisitions and tries to describe the overall effect of domestic and cross-border acquisitions on UK bank shareholder wealth.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the study1

Problem Statement1

Purpose of the study2

Significance of the study2

Rationale of the study3

CHAPTER 2: LITERATURE REVIEW4

M&A motives4

Target and bidders in European M&A8

Means of payment in M&A9

Domestic versus cross-border M&A12

UK versus Continental Europe M&A14

Focus versus diversification M&A15

Research Design17

Literature Search17

Keywords17

CHAPTER 4: DISCUSSION18

CHAPTER 5: CONCLUSION21

REFERENCES25

CHAPTER 1: INTRODUCTION

Background of the study

As one of the most predominant forms of corporate restructuring, mergers and acquisition activity tends to occur in waves. Each merger movement has somewhat distinctive characteristics reflecting the dominant economic and technological factors operating during that particular period (Weston et al, 1998, 45). The wave of the 1990s represents the fifth one of the 20th century. It is also the largest based on the number of deals each year and the size of such transactions, (Hitt et al, 1998, 78). Acquisitions appear as the common solution in this era to forces driving global competition and industry consolidation. Size was no longer deemed to be a barrier preventing a possible bid, (Aw & Chatterjee, 2000, 77). A significant feature of the 1990s surge in activity is that much of it has been transnational. Reasons cited include the availability of new markets, opportunities to achieve production efficiencies or scarce specialised resources or as a means of reducing political risk. An ever increasing emphasis on globalisation has stimulated the growth in cross border merger activity, (Hitt 2000, 49). By 2000 cross border deals accounted for over 80% of industrial countries FDI (UNCTAD 2002) and growing at the expense of greenfield investment (Reuer et al 2004, 41).

Problem Statement

A greater number of foreign bids along with first time exposure of deregulated industries to mergers are hallmarks of the UK takeover phenomena in the 1990s. By 1998 cross border acquisitions accounted for 85% of the value of FDI inflow into the UK (World Investment Report (2000) with industry deregulation serving as a major influence on the level of acquisition activity, (Schoenberg & Reeves, 1999, ...