An International Study on Shareholder Protection in Minority M&A Transactions

35 Pages Posted: 11 Feb 2015  

Wenjing Ouyang

University of the Pacific

Pengcheng Zhu

University of San Diego

Date Written: February 9, 2015


We define minority M&A transactions as those initiated by target controlling shareholders to acquire minority shareholders' ownership in the same target firm. Existing studies provide diverse evidence with regard to whether minority shareholders are expropriated by controlling shareholders in minority merger deals. Rather than studying transactions in a particular country, we use an international minority merger sample covering 55 countries. Furthermore, we examine multiple merger outcomes to present a comprehensive analysis of minority shareholder rights protection. We find, in countries with stronger corporate governance and legal enforcement, the merger premium and the probability of cash payment are higher but the deal completion rate is lower, suggesting stronger minority shareholder rights in these transactions. Our study provides new evidence of minority shareholder protection in the international scope. Our results suggest the different observation of minority shareholder protection can be attributed to the country-level corporate governance and legal enforcement.

Keywords: minority shareholder, corporate governance, international merger

JEL Classification: G30, G34

Suggested Citation

Ouyang, Wenjing and Zhu, Pengcheng, An International Study on Shareholder Protection in Minority M&A Transactions (February 9, 2015). Asian Finance Association (AsianFA) 2015 Conference Paper. Available at SSRN: or

Wenjing Ouyang (Contact Author)

University of the Pacific ( email )

3601 Pacific Avenue
Stockton, CA 95211
United States

Pengcheng Zhu

University of San Diego ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

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