Competition for Board Seats Following Stock-for-Stock Mergers
Posted: 29 Jul 2003
We examine the board structure of firms following stock-for-stock mergers. We find that former target inside (outside) directors are more likely to join the combined firm board when target insiders (outsiders) have a relatively strong position on the pre-merger target board. The relative size of the target firm, target firm profitability, and target blockholder ownership also influence whether target directors join the combined board. We conclude that competition for board seats on the combined board is won by the target directors with greater bargaining positions.
JEL Classification: G34
Suggested Citation: Suggested Citation