Why do banks across the globe continue to merge and investors continue to encourage such mergers when the vast body of academic research demonstrates that mergers either add no value or actually reduce stockholder value? A former banker and current consultant to banks in the US and Europe, Mr. Davis addresses this issue by a series of in-depth interviews with senior executives from over 30 banks with extensive merger experience, as well as over a dozen banking analysts and consultants. Key issues such as the ability to achieve significant cost and revenue synergies, due diligence, people selection, IT integration, cultural conflict, leadership and speed of decision-making are all examined in detail. While the interviewees almost unanimously predict an acceleration of the current merger trend, the book concludes with an examination of alternatives to this consensus. It provides guidance for the future in focussing on the importance of substantial cost savings, firm and experienced leadership, efficient IT integration and swift decision making.
Finally it suggests that the planned explosion of cross border mergers demands a revision of the old merger model based on substantial short term cost savings.