Mergers and acquisitions in the Lebanese banking industry

Abstract

The occurrence of mergers and acquisitions is not new in the United States. American companies have become accustomed since the late 1880's to such activities. Yet, nowadays, consolidations have become more important both in dollar vollume and number. Corporations are making use of mergers and acquisitions as a tool to be more competitive in our fast changing world where advanced technology and globalization are affecting everything. The US banking industry is a major constituent of the consolidations taking place and which resulted in the occurrence of important mutations in the sector over the last decade. It seems that Lebanon is also following this trend. Although in other industries consolidations are practically nonexistent, the Lebanese banking sector is witnessing an important number of mergers and acquisitions. Lebanese banks are facing many challenges: increasing local and foreign competition, more severe regulations, and a constantly developing technology. In order to survive, Lebanese banks, considered as small in size relatively to foreign ones, have to find partners with whom to consolidate. This paper will try to provide a better understanding of mergers and acquisitions by discussing: - the several phases of mergers and acquisitions that American companies have gone through - the motives behind mergers and acquisitions - the trend, motives, and regulations of bank mergers in the United States - the occurrence, motives and regulations of bank mergers in Lebanon- the effect of Lebanese bank mergers on the concentration.