39 research outputs found
Ownerschip and corporate governance interactions in European mergers and acquisitions.
No full textstatus: Publishe
Influence of family ownership on the industry-diversifying nature of a firm’s M&A strategy: Empirical evidence from Continental Europe
No full textWe investigate how family ownership influences the industry-diversifying nature of M&As by listed companies in Continental Europe and the corresponding shareholder value effects at deal announcement. For a large sample of 3485 M&As during 2005–2013, we observe that acquirers having a family as the largest shareholder are less inclined to take over an unrelated target firm than lone-founder and other types of non-family firms. However, as the size of the family ownership stake increases, family firms become more eager to follow an industry-diversifying M&A strategy. While industry-diversifying M&As are associated with lower abnormal returns for acquirer shareholders on average, we also observe that family ownership fully reverses this negative effect. We therefore conclude that those unrelated M&As, although still representing a conflict of interest with the family firm’s minority investors, do not destroy shareholder value on average
Influence of acquirer boards on M&A value creation: Evidence from Continental Europe
No full textAbstract We examine how the size and the composition of acquirer boards are associated with shareholder abnormal returns for 2,230 M&As made by listed firms in Continental Europe. Although board size proves insignificant, our findings do offer some evidence as to a beneficial effect of board diversity on M&A value creation. Gender diversity appears marginally positively associated with acquirer shareholder abnormal returns. The fraction of foreign directors is in general not significantly positive, unless the rule of law in the acquirer country is weak. Nonetheless, nationality diversity in the board turns out harmful in purely domestic takeovers. The influence of age diversity is marginally positive, yet only in domestic and horizontal takeovers. Next, the fraction of independent directors has a robust positive effect on the acquirer CAR, while directors with multiple board appointments prove valuable especially through preventing firms from pursuing poor takeovers. Finally, CEO duality is detrimental only in industry‐diversifying deals initiated by acquirers that are not controlled by an individual or a family shareholder. Any negative CEO‐duality effect is mitigated when the acquirer‐country rule of law is strong.This work was supported by the Belgian National Bank (project number: NBB/13/03), FWO (project number: G.0810.12), and the Vlerick Academic Research Fund (subsidized by the Flemish government)
Do acquirer boards influence M&A value creation? Evidence from European takeovers
No full textWe examine how the size and composition of acquirer boards relate to shareholder announcement returns for a sample of 3,289 M&As initiated by European listed firms. We find that board size has an U-shaped relation with M&A announcement returns in Continental Europe. Also, acquirer shareholders in Continental Europe realize significantly larger abnormal returns if boards have a larger fraction of independent and busy directors. Next, our findings question the recent call for more diversity in board composition by the public and by regulation-shaping bodies, at least in the context of M&As. While gender and age diversity prove irrelevant, we show that the proportion of foreign directors is significantly negatively associated with value creation in domestic takeovers. In the case of cross-border M&As, we find no positive effect either. Finally, and contrary to expectations, we detect a significant negative impact of director expertise in the target industry on acquirer shareholder value in industry-diversifying takeovers outside Continental Europe
