Value of Control in Family Firms: Evidence from Mergers and Acquisitions

34 Pages Posted: 17 Oct 2015

See all articles by Nihat Aktas

Nihat Aktas

WHU - Otto Beisheim School of Management

Santo Centineo

WHU - Otto Beisheim School of Management

Ettore Croci

Catholic University of the Sacred Heart of Milan

Multiple version iconThere are 2 versions of this paper

Date Written: October 15, 2015

Abstract

This article studies European acquisitions in the period 1990-2013 to examine the relationship between family ownership and the propensity to undertake diversifying acquisitions. We show that family firms, especially those highly leveraged, tend to make more cross-industry acquisitions as this allows the owners to effectively diversify their wealth without selling their shares. Our results also indicate that family firms that value control high (i.e., family firms with high leverage) appear not to diversify at the detriment of minority shareholders.

Keywords: family firms, leverage, control motives, acquisitions

JEL Classification: G34

Suggested Citation

Aktas, Nihat and Centineo, Santo and Croci, Ettore, Value of Control in Family Firms: Evidence from Mergers and Acquisitions (October 15, 2015). Available at SSRN: https://ssrn.com/abstract=2674827 or http://dx.doi.org/10.2139/ssrn.2674827

Nihat Aktas (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Santo Centineo

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Ettore Croci

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

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