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An emerging market for corporate control? The Mannesmann takeover and German corporate governance

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  • Höpner, Martin
  • Jackson, Gregory

Abstract

Corporate governance in Germany is often described as a bank-oriented, block-holder or stakeholder model where markets for corporate control have not played a significant role. This case study of the hostile takeover of Mannesmann AG by Vodafone in 2000 demonstrates how systemic changes during the 1990s have eroded past institutional barriers to takeovers. These changes include the strategic reorientation of German banks from the house bank to investment banking, the growing consensus and productivity orientation of employee co-determination and corporate law reform. A significant segment of German corporations are now subjected to a market for corporate control. The implications for the German model are examined in light of both claims by agency theory for the efficiency of takeover markets, as well as the institutional complementarities within Germany's specific variety of capitalism. While the efficiency effects are questionable, the growing pressures for German corporations to achieve the higher stock market valuations of their Anglo-American competitors threaten the distributional compromises underlying the German model.

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  • Höpner, Martin & Jackson, Gregory, 2001. "An emerging market for corporate control? The Mannesmann takeover and German corporate governance," MPIfG Discussion Paper 01/4, Max Planck Institute for the Study of Societies.
    • Handle: RePEc:zbw:mpifgd:014
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    References listed on IDEAS

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    Cited by:

    1. Andreas Hackethal & Reinhard H. Schmidt & Marcel Tyrell, 2005. "Banks and German Corporate Governance: on the way to a capital market‐based system?," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(3), pages 397-407, May.
    2. Gregory Jackson & Andreas Moerke, 2005. "Continuity and Change in Corporate Governance: comparing Germany and Japan," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(3), pages 351-361, May.
    3. Lai Trung Hoang & Cuong Cao Nguyen & Baiding Hu, 2017. "Ownership Structure and Firm Performance Improvement: Does it Matter in the Vietnamese Stock Market?," Economic Papers, The Economic Society of Australia, vol. 36(4), pages 416-428, December.
    4. Michael Nietsch, 2005. "Corporate Governance and Company Law Reform: a German perspective," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(3), pages 368-376, May.
    5. -, 2010. "Foreign Direct Investment in Latin America and the Caribbean 2009," La Inversión Extranjera Directa en América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37607 edited by Eclac, September.

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