The European insurance sector went through a radical transformation in the 1990s. Harmonization of EU regulation lead to a strong increase in M&A, and several factors indicate a new wave of transactions. We analyze the influence of transaction timing, geographical and industry strategy, and experience on short- and long-term value creation by M&A of European insurers. Transactions in the bottom of the M&A cycle, fully focusing or diversifying transactions, and transactions by inexperienced and most experienced acquirers created more long-term value. These findings are mostly contrary to short-term capital market reactions and results of previous research on the U.S. market.
The European insurance sector went through a radical transformation in the 1990s. Harmonization of EU regulation lead to a strong increase in M&A, and several factors indicate a new wave of transactions. We analyze the influence of transaction timing, geographical and industry strategy, and experience on short- and long-term value creation by M&A of European insurers. Transactions in the bottom of the M&A cycle, fully focusing or diversifying transactions, and transactions by inexperienced and most experienced acquirers created more long-term value. These findings are mostly contrary to short-term capital market reactions and results of previous research on the U.S. market.