Cross-border bank mergers and acquisitions in Europe and diversification strategies: an attempt to analyze the determinants of pan-European bank consolidation.

Summary The resumption of mergers between European banking groups has raised questions about the justifications for a move towards pan-European banking consolidation. This research is part of the attempts to analyze the logic of pan-European banking mergers and acquisitions (M&A) by examining the relevance of the arguments of the traditional analysis of this process. In a perspective of renewal of the concepts of analysis of these banking strategies, the classical sources of value creation are questioned, particularly in the case of pan-European banking M&A. This criticism is at the heart of our problematic. We therefore seek to better understand the logic of cross-border bank mergers in the EU by taking into consideration the specificities of these operations and the evolution of the conceptual framework of the analysis of the banking business. We propose an analysis grid of the determinants of cross-border M&A in the EU that allows to focus the analysis on two main criteria by referring to their respective theoretical frameworks. The first criterion for analyzing these banking strategies concerns the geographical aspect related to the markets of transnational expansion. The second criterion is related to the nature of the banking business of the parties involved in a cross-border M&A operation. The idea is to evaluate the relevance of the strategies of diversification of banking activities and geographical type in the European case. The contribution of our study is to validate this grid by adopting three different approaches. First, we propose to apply this grid to the European case within the framework of an analytical approach of the two criteria at the same time. Second, we would like to empirically evaluate the theoretical framework of each criterion for analyzing the reasons for cross-border M&A of EU banks separately by considering two empirical trials. In the first trial, we analyze the determinants of pan-European bank consolidation activity from a macroeconomic approach. The main idea is to identify certain countries and their characteristics that will affect the trend of cross-border bank M&A in the EU. This identification allows us to test the internationalization hypotheses in the European case. In the second essay, we empirically assess the relevance of the performance arguments by considering a microeconomic analysis of the strategic logics of cross-border M&A on a sample of the main EU banks. Our empirical tests allow us to highlight the two criteria for analyzing the reasons for cross-border and pan-European M&A while considering their strategic logics of diversification.