The Disappearing ‘Deutschland AG’ – An Analysis of Blockholdings in German Large Caps

Problems and Perspectives in Management, Vol.9, Issue 4, pp.46 - 58

28 Pages Posted: 4 Mar 2008 Last revised: 24 May 2012

See all articles by Kerstin Fehre

Kerstin Fehre

Karlsruhe Institute of Technology

Marc Steffen Rapp

University of Marburg - School of Business & Economics; University of Marburg - Marburg Centre for Institutional Economics (MACIE)

Bernhard Schwetzler

HHL Leipzig Graduate School of Management - Department of Finance

Marco O. Sperling

University of Marburg - School of Business & Economics

Date Written: November 30, 2011

Abstract

The German corporate governance system changed substantially over the last ten years. Meanwhile, ownership structures of German firms changed significantly. We examine the phenomenon of changing ownership structures by studying blockholdings of German large caps between 1997 and 2006. We examine the dynamics of blockholdings by analyzing the evolution of free float and block trades, where at least 5% of voting rights change hands. Two findings emerge: First, we find that free float increases from 65% in 1997 to 75% in 2006, mainly caused by German financials and German government entities. Simultaneously, we observe a surprisingly high number of block trades: on average 1.6 block trades per firm from 1997 to 2006. Second, we find that particularly individuals and German industrials are guarantors for a stable ownership structure. German financials or German government entities as blockowners increase the free float and the likelihood of block trades. Moreover, block trades are more likely to occur in firms having foreign investors as owners. Our findings are of interest with respect to the evolution of the so-called ‘Deutschland AG’ but also with respect to the current anchor shareholder discussion.

Keywords: block trades, ownership structure, ultimate ownership, Germany

JEL Classification: G30, G32, G34

Suggested Citation

Fehre, Kerstin and Rapp, Marc Steffen and Schwetzler, Bernhard and Sperling, Marco O., The Disappearing ‘Deutschland AG’ – An Analysis of Blockholdings in German Large Caps (November 30, 2011). Problems and Perspectives in Management, Vol.9, Issue 4, pp.46 - 58. Available at SSRN: https://ssrn.com/abstract=1100582

Kerstin Fehre

Karlsruhe Institute of Technology ( email )

Kaiserstraße 12
Karlsruhe, Baden Württemberg 76131
Germany

Marc Steffen Rapp (Contact Author)

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

University of Marburg - Marburg Centre for Institutional Economics (MACIE) ( email )

Am Plan
Marburg, 35032
Germany

Bernhard Schwetzler

HHL Leipzig Graduate School of Management - Department of Finance ( email )

Jahnallee 59
D-04109 Leipzig
Germany
+49-341-9851-685 (Phone)
+49-341-9851-689 (Fax)

Marco O. Sperling

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

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