Year-end Sale % OFF 
Abstract
This study updates and extends the literature regarding Federal Deposit Insurance Corporation purchase and assumption transactions. Unlike voluntary mergers, our results indicate that winning bidders do not overpay. Moreover, our results indicate that acquiring banks's undertaking large failed bank transactions experienced large wealth transfers. Excess returns may be explained by the synergy hypothesis or over subsidization hypothesis. We conclude that excess returns are not driven by scale or scope economies; evidence is consistent with diversification gains or the over subsidization hypothesis. It also appears that well-capitalized acquirers received preferential treatment.
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