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Business Groups, Bank Control and Large Shareholders: An Analysis of German Takeovers

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Listed author(s):
  • Ekkehart Boehmer

    (Humboldt University, Berlin)

Abstract

I analyse the effect of ownership structure and bank control on performance. I employ a unique data set of 715 German takeovers to test whether group structure, large shareholders, and bank control affect their value to shareholders. First, I find that takeovers increase bidder value, but generally not that of the business group surrounding it. Second, majority owners provide no clear benefit. Third, bank control is only beneficial if it is counter-balanced by another large shareholder. Fourth, the worst takeovers are completed by firms that are majority-controlled by financial institutions.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 1999.20.

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Date of creation: Feb 1999
Handle: RePEc:fem:femwpa:1999.20
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Keywords: Business groups; German banks; Corporate governance; Takeovers;

Other versions of this item:

Find related papers by JEL classification:
  • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
  • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
  • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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  7. repec:hrv:faseco:30728046 is not listed on IDEAS
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  20. Asquith, Paul, 1983. "Merger bids, uncertainty, and stockholder returns," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 51-83, April.
  21. Lang, Larry H. P. & Stulz, ReneM. & Walkling, Ralph A., 1989. "Managerial performance, Tobin's Q, and the gains from successful tender offers," Journal of Financial Economics, Elsevier, vol. 24(1), pages 137-154, September.
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  23. Jarrell, Gregg A & Brickley, James A & Netter, Jeffry M, 1988. "The Market for Corporate Control: The Empirical Evidence Since 1980," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 49-68, Winter.
  24. Randall Morck & Masao Nakamura, 1999. "Banks and Corporate Control in Japan," Journal of Finance, American Finance Association, vol. 54(1), pages 319-339, 02.
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