Bank mergers and acquisitions in Central Eastern Europe with a focus on bank valuation: The case of Raiffeisen International AG

Thomas Ravnsbaek Andersen

Student thesis: Master thesis


An intensified competition is taking place in the international financial markets influenced by technological changes and to a great extent the increased integration of financial markets. Throughout the 1990th one has seen a large process of financial consolidation in the European Union due to the implementation of the single market for financial services in the beginning of the decade and more recently the introduction of the Euro. With continuously high economic growth in Central Eastern Europe (CEE) and the expansion of the European Union towards east, a similar process of consolidation is now taking place in this region. Banks play an important role in such a process, where especially foreign banks have been active on the CEE market helping in the transition of the economies and improving efficiency in the financial sectors. This makes the theme of this paper highly relevant. Several studies show that mergers and acquisitions (M&A) do not turn out successfully for the acquiring company, thereby not resulting in value creation. There are several reasons why value is not created, but many times it is because the acquiring company paid too much1. Thus, a main part of this thesis will be focusing on the complex issue of valuing banks, which is a central aspect in any M&A between banks. In order to make a practical approach and provide a better understanding of the issue, I have chosen Raiffeisen International AG (RI) as case company. Through an ex-post analysis I will make a valuation of two carefully chosen acquisitions made by RI, which have performed differently. This ex-post analysis implies that I will be looking at the performance of the acquisitions made by RI in Slovenia and Romania in the years following the acquisitions, and try to identify if the acquisition prices paid in the respective years can be justified in retrospect. Furthermore, I aim at addressing the causes of success, or lack of such, in these two cases.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2008
Number of pages96