Theoretical aspects of the essence of forms of bank consolidation

Abstract

The article considers theoretical aspects of the essence of the forms of bank consolidation. It is noted that the main forms of bank consolidation are mergers and acquisitions. Attention is focused on the ambiguous interpretation of the terms ‘mergers and acquisitions’ in the theory and practice of banking. A comparative analysis of the definitions of the concepts of ‘merger’ and ‘acquisition’ is carried out. The characteristic features and peculiarities of mergers and acquisitions of banks are allocated. The collective meaning of the term ‘mergers and acquisitions’ is studied, which is manifested not only in the conclusion of merger, acquisition or takeover of banks, but also in the acquisition of corporate control. The author presents her own interpretation of the essence of the forms of bank consolidation: mergers, acquisitions, and affiliations. It is noted that a merger involves a combination of banks, which may be carried out in the form of acquisition of shares or fixed assets of a bank. The author identifies the characteristic features of a bank merger: merger of banks, termination of activity of one of the participating banks and establishment of a new bank. It is found that bank takeover is the integration of two or more banks on the basis of establishing absolute control of the acquiring bank over other banks. The author identifies specific features of bank takeovers: acquisition of a significant number of shares or most of the property of one bank by another bank. It is emphasised that bank mergers are the process of acquiring bank assets or a bank as a whole under certain conditions. It is noted that the hostile nature of the motives and objectives of banks participating in mergers, acquisitions and takeovers can be identified as bank takeovers. The author argues that it is expedient to use the inseparable definition of ‘mergers and acquisitions of banks’ to reveal the essence of the processes taking place in the banking market of mergers and acquisitions and to form the signs, features and characteristics of its development, which should be considered as an equivalent to the concept of ‘mergers and acquisitions’ in foreign literature.