An Emerging Market for Corporate Control? The Mannesmann Takeover and German Corporate Governance

Max-Planck-Institute for the Study of Societies, Discussion Paper No. 01/4

53 Pages Posted: 24 Nov 2001

See all articles by Gregory Jackson

Gregory Jackson

Freie Universität Berlin

Martin Höpner

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for the Study of Societies

Date Written: September 2001

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.

Keywords: Corporate Governance, Takeovers, Germany

JEL Classification: G3, P5

Suggested Citation

Jackson, Gregory and Höpner, Martin, An Emerging Market for Corporate Control? The Mannesmann Takeover and German Corporate Governance (September 2001). Max-Planck-Institute for the Study of Societies, Discussion Paper No. 01/4. Available at SSRN: https://ssrn.com/abstract=285232 or http://dx.doi.org/10.2139/ssrn.285232

Gregory Jackson (Contact Author)

Freie Universität Berlin ( email )

Boltzmannstrasse 20
D-14195 Berlin, 14195
Germany

HOME PAGE: http://www.wiwiss.fu-berlin.de/institute/management/jackson/team/gjackson/index.html

Martin Höpner

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for the Study of Societies ( email )

Paulstr. 3
50676 Koln
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
2,286
Abstract Views
8,107
rank
5,739
PlumX Metrics