Influence of family ownership on the industry-diversifying nature of a firm's M&A strategy: Empirical evidence from Continental Europe
Name:
Publisher version
View Source
Access full-text PDFOpen Access
View Source
Check access options
Check access options
Publication type
Journal article with impact factorPublication Year
2016Journal
Journal of Family Business StrategyPublication Volume
7Publication Issue
4Publication Begin page
210Publication End page
226
Metadata
Show full item recordAbstract
We 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.Keyword
Accounting & Finance, Diversification, Mergers & Acquisitions, Ownership, Family Firms, Lone-founder Firms, Corporate Governance, EuropeKnowledge Domain/Industry
Accounting & FinanceEntrepreneurship
ae974a485f413a2113503eed53cd6c53
10.1016/j.jfbs.2016.11.002