Business Groups,Bank Control,and Large Shareholders: An Analysis of German Takeovers |
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| Institution: | 1. IFIMUP and IN-Institute of Nanoscience and Nanotechnology, Departamento de Física e Astronomia da Faculdade de Ciências da Universidade do Porto, 4169-007 Porto, Portugal;2. CFP, Department of Physics Engineering, FEUP, Rua Dr. Roberto Frias, 4200-465 Porto, Portugal;1. Department of Sports Medical, The First Affiliated Hospital of Shenzhen University (Shenzhen Second People Hospital), Shenzhen 518000, PR China;2. Biomechanics and Medical Information Institute, Beijing University of Technology, Beijing 100022, PR China |
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| Abstract: | To analyze the consequences of concentrated ownership and bank control for the performance of acquiring firms, I employ a unique data set of 715 German takeovers. First, I find that takeovers increase bidder value, but majority owners provide no clear benefit. Second, bank control is beneficial only if it is counterbalanced by another large shareholder. Third, the worst takeovers are completed by firms that are majority-controlled by financial institutions. I conclude that majority control, whether exercised by a bank or another shareholder, increases the likelihood of decisions that do not maximize shareholder value. Journal of Economic Literature Classification Numbers: G34, G32, G21. |
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