Mergers, Acquisitions, and Controlling Shareholders: Canada and Germany Compared

Banking and Finance Law Review, Vol. 18, pp. 342-371, October 24, 2005

32 Pages Posted: 30 Mar 2006

See all articles by Aviv Pichhadze

Aviv Pichhadze

affiliation not provided to SSRN

Abstract

A growing body of literature on corporate governance compares Canada to the United States and/or the United Kingdom, given their Anglo-Saxon ancestry. However, this paper compares Canada to Germany and considers an often overlooked resemblance between the two: the incidence of controlling shareholders. This is particularly important given that the two countries represent two opposing corporate governance regimes. While Canada is characterized by a market-based governance regime and Germany by a bank-based governance regime, both countries exhibit concentrated ownership structures. The similarity between corporate control mechanisms in Canada and Germany is further discussed when focusing on the narrow field of mergers and acquisitions, using examples of disputes between the holders of restricted shares and holders of superior shares, and proposed transactions for change in control. The importance of recognizing the similarity between these two countries is three-fold: (i) from a policy perspective, an understanding of Canada's corporate sector path-dependence is required for the policymaker to set rules and regulations that best serve the Canadian corporate sector; (ii) from the perspective of corporate governance, the paper serves as an initial step in the examination of Canada's unique "mid-way" position between the United States and the United Kingdom, on the one hand, and Germany and Japan, on the other; and (iii) from the perspective of mergers and acquisitions practice, the Canadian practitioner may have points of reference other than the United States and the United Kingdom that may be more adequate at times.

Keywords: Mergers, Acquisitions, Controlling Shareholders, Corporate Governance, Canada, Germany

JEL Classification: G32, G34, G38, K22, K29, K33

Suggested Citation

Pichhadze, Aviv, Mergers, Acquisitions, and Controlling Shareholders: Canada and Germany Compared. Banking and Finance Law Review, Vol. 18, pp. 342-371, October 24, 2005, Available at SSRN: https://ssrn.com/abstract=893855

Aviv Pichhadze (Contact Author)

affiliation not provided to SSRN

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