We offer a new explanation for why academic studies typically fail to find value creation in
bank mergers. Our conjectures are predicated on the idea that, until recently, large bank acquisitions were
a new phenomenon, with no best practices history to inform bank managers or market investors. We
hypothesize that merging banks, and investors pricing bank mergers, “learn-by-observing” information
that spills over from previous bank mergers. We find evidence consistent with these conjectures for 216
M&As of large, publicly traded U.S. commercial banks between 1987 and 1999. These findings are
consistent with semi-strong stock market efficiency.