After 2002, a tendency to go for cross-border merger was noticed in Europe. In fact, the merger regulatory authority of UK encouraged the UK banks to make cross-border merger deal. As many bank mergers within the countries took place in the 1985-2000 period, the European Banks were asked to shift their focus to abroad for further consolidation.
It was expected that cross-border bank mergers would be able to fill up the market gaps by generating extensive network across countries. But, in reality, it was observed that the cross-border bank mergers have underperformed in Europe, whereas the domestic mergers have generated value by substantial amount.
To get the real picture of European Bank Mergers, now we will discuss some of the important bank mergers of Europe:
- In the year 1997, Union Bank of Switzerland merged with Swiss Bank.
- In 1998, Banque Nationale de Paris(BNP) of France went through a merger with Banque Paribas and a new bank was formed with market capital of $688 billion.
- In the same year of 1998, the merger between Hypobank and Bayerische Vereinsbank, created a new banking institution which became the second largest bank in Germany.
- In 1999, Banco Santander acquired Banco Central Hispano and became the largest bank in Spain.
- In the same year of 1999, Bank Austria did a merger deal with Creditanstalt Bankverein and became the largest bank in Austria.
- In 2000, UBS of Switzerland acquired US Investment Bank Paine Webber.
- In the same year of 2000, Credit Suisse of Europe acquired Donaldson, Lufkin and Jenrette.
- Recently, in 2007, two Italian Banks, UniCredit and Capitalia merged and became the second largest bank in Europe after HSBC.