Owners on both sides of the deal : mergers and acquisitions and overlapping institutional ownership
By: GORANOVA, Maria
.
Contributor(s): DHARWADKAR, Ravi | PAMELA, Brandes.
Material type: 
ArticlePublisher: U.S.A : Wiley-Blackwell, oct. 2010Subject(s): Governança Corporativa | Fusão de Empresas | Negociação | Modelo de GestãoStrategic Management Journal 31, 10, p. 1114-1135Abstract: Using a corporate governance lens, this study considers owners with a stake in both the acquiring and the target firms in the context of mergers and acquisitions. A possible agency problem arises with regard to monitoring implications as managers may be able to take advantage of compromised monitoring because overlapping owners may focus on the aggregate value for both the acquiring and the target firms and nonoverlapping owners may be interested only in the acquirer's side of the deal. The results suggest that when more owners overlap in their ownership of both the acquiring and target firms, the acquiring firms are more likely to experience decreased shareholder value through merger and acquisition deals. This effect, however, can be constrained by stronger board control. Copyright © 2010 John Wiley & Sons, Ltd.
Using a corporate governance lens, this study considers owners with a stake in both the acquiring and the target firms in the context of mergers and acquisitions. A possible agency problem arises with regard to monitoring implications as managers may be able to take advantage of compromised monitoring because overlapping owners may focus on the aggregate value for both the acquiring and the target firms and nonoverlapping owners may be interested only in the acquirer's side of the deal. The results suggest that when more owners overlap in their ownership of both the acquiring and target firms, the acquiring firms are more likely to experience decreased shareholder value through merger and acquisition deals. This effect, however, can be constrained by stronger board control. Copyright © 2010 John Wiley & Sons, Ltd.
Click on an image to view it in the image viewer
There are no comments for this item.