Impact of Fintech M&As on US and EU acquirers’ market performance

This study examines the impact of U.S. and EU Fintech mergers and acquisitions (M&As) on acquirers’ market performance between 2012 and 2022, with a focus on acquisition type and structure. Using event study methodology, we measure short-term cumulative abnormal returns (CARs) across six event windows, comparing performance before and during the COVID-19 pandemic. Results show that Fintech M&A announcements positively influence acquirers’ market performance, with stronger effects during the pandemic. Domestic and cash-financed deals outperform cross-border and stock-financed ones in both periods. The results offer compelling insights for investors and analysts regarding the effectiveness of Fintech M&As in enhancing the acquirers’ market performance. They can prioritize firms engaged in domestic and cash-financed Fintech M&As for potential short-term gains. Additionally, the findings present signals for shareholders, aiding in more efficient capital allocation strategies in the stock market. In addition to its robust method of collecting data and selecting Fintech Acquirers, the originality of this research lies in addressing the gap regarding the recent impact of Fintech M&As on acquirers’ market performance in both US and EU settings. By extending the analysis beyond 2019, this study aims to explore the impact of Fintech M&As on acquirers’ stock returns (cross-border vs domestic and cash vs stock) during the COVID-19 pandemic.

Capital market · Cash flow · Domestic market · Event study · Mergers and acquisitions · Stock market · COVID-19 Pandemic Impacts · FinTech, Crowdfunding, Digital Finance · Working Capital and Financial Performance