1. What would be the strategic motivations for a consolidation of large banks in the European Union?
2. What other issues in addition to strategic concerns are hindering or motivating banks that are considering acquiring other banks in the European Union?
3. What competitive reactions if any do you expect resulting from Credit Agricole's restructuring of its Greek unit and the acquisition of Intesa's Italian branch? Why or why not?
4. If you were the CEO of Agricole, would you pursue an acquisition target in the near future? Why or why not?
(700 words total, not including questions, with references)© BrainMass Inc. brainmass.com October 10, 2019, 8:26 am ad1c9bdddf
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1. Strategic motivation for consolidation of large banks in Europe is as follows. The European Union has expanded and along with it the scale of banking has become larger. The strategic motivation for consolidation is growth. Further, since the customers of these banks operate across borders, the banks also follow their clients across the borders. In addition, to avoid financial crisis observed in the United States, banks consolidated to increase their financial strength. The strategic motivation of European Banks arises from the desire to achieve economies of scale, reduce cost of operation, and increase their revenues. There is also the need for cross border and cross segment consolidation which has motivated European Banks to consolidate. Important motivators of consolidation include the harmonization of the legal system and the reducing of product nationalism. The direct motivation for consolidation is the impact of technology on banking environment, reduction of cross border trade barriers, and deregulation of the domestic market. Specifically, the introduction of Second Banking Co-ordination Directive allowed European Banks to provide services across the European Union. The key motivators for consolidation were integration of banking markets and increasing ...
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