This document summarizes a study on the impact of the category of fintech firms acquired on the returns earned by acquirers. The study analyzed over 100 fintech acquisition deals from 2009-2018 in North America and Europe. It found that acquirers generally earn positive abnormal returns, but returns decrease for acquisitions of firms in alternative lending/investment tech and payments/billing tech due to potential oversupply issues. Acquisitions of healthcare fintech firms see higher returns, possibly because of similarities to the insurance industry. The study suggests acquirers of certain categories strengthen marketing strategies and that considering longer timeframes and larger markets could provide more insights.

1. CAN TARGET'S FINTECH
CATEGORY DETERMINES
BETTER TAKEOVER
RESULTS?
A Fintech Acquisition Study in North America &
Europe | Period: 2009-2018
ASTRIDTANJUNG
MSCGRADUATE
ERASMUSSCHOOLOFECONOMICS

2. RESEARCH
BACKGROUND
SECTION 1

3. FINTECH HAS A BROAD DEFINITION
& THE SERVICES ARE QUITE VARIED
BUT ARE YOU AWARE THAT
THE CATEGORIES PLAY SOME
IMPORTANT ROLES?

4. Helping us understand the different
types of Fintech
The fact they are still potentially growing
in numbers
And that they have different performances in the market!
Some perform better than the others
Alternative
lending
Capital
markets
tech
Payments/
billing tech
Wealth
tech
Financial
Management
Solutions
Insurtech
Regulatory
tech
Fraud
prevention
Blockchain
Healthcare
Fintech
Remittance
(money transfer)
SUCH AS...

5. PAYING ATTENTION
TO THE CATEGORY
OF A FINTECH FIRM
BECOMES
NECESSARY WHEN
ACQUIRING THEM
SO WHAT?

6. RESEARCH
DESIGN
SECTION 2

7. Variables
-Dependent: Acquirer's gains
-Independent: Target's Fintech category
Sample
+/- 100 Fintech acquisition deals (min. $5 mn) in North America &
Europe, which are completed between 2009 (post crisis) and 2018
Methodology
-Calculate acquirer's cumulative abnormal returns in the short-run
-Regress them against the target's Fintech category
Databases
Deals downloaded from Datastream | deal-specific characteristics
from Thomson One | firm-specific financials from Worldscope

8. RESEARCH
FINDINGS
SECTION 3

9. AVERAGE CUMULATIVE ABNORMAL RETURNS
In general,
acquirers earn
extra money
from Fintech
acquisition
3 DAYS
AROUND THE
ANNOUNCEMENT:
+ 1.25
7 DAYS
AROUND THE
ANNOUNCEMENT:
+ 1.48
11 DAYS
AROUND THE
ANNOUNCEMENT:
+ 1.55

10. Acquirer returns
unexpectedly
decrease in the
most popular
categories
(ALTERNATIVE LENDING/INVESTMENT TECH &
PAYMENTS/BILLING TECH)
Acquirer returns
increase in
healthcare
Fintech
WITH A HIGH COEFFICIENT MAGNITUDE
COMPARED TO OTHER CATEGORIES (0.132)
REGRESSION
RESULTSFOR
THEACQUIRER

11. Fintech acquisitions are generally beneficial for acquirers but it
depends on which category to acquire
Acquirer returns decrease in the most popular categories
because tight competitions in the short-run may trigger oversupply,
which leads to losses and poor performances in the market
Positive gains from acquiring healthcare Fintech might due to its
similarity to insurance industry: the claims they have to pay are usually
fewer than the total funds they get from the premiums
Implications

12. STRONG
MARKETING
STRATEGY
for acquirers of
Fintech
payments/billing
and lending
INCREASE
SAMPLE SIZE
e.g. from a longer
observation period
CONSIDER
OTHER
LARGEST
EMERGING
MARKETS
e.g. China and India
ALSO ASSESS
THE LONG-
TERM
EFFECTS
to explore the
effects' differences
in both time
frames
Suggestions FOR COMPANIES &
FURTHER STUDIES

13. STUDYING MARKET
REACTIONS TO FINTECH
ACQUISITIONS IN NORTH
AMERICA AND EUROPE:
THE IMPACT OF FINTECH
CLASSIFICATION OF TARGET
FIRMS ON THE ACQUIRERS’
CUMULATIVE ABNORMAL
RETURNS
ORIGINAL THESIS TITLE:
ASTRID
TANJUNG
hattaarts2018@gmail.com
AUTHOR
Dedicated to all my heroes in this study
completion