Ownership Structure and Acquiring Firm Performance: – An Empirical Analysis of Minority Expropriation

Sammanfattning: This study examines the relationship between ownership structure and acquiring firm performance in order to determine whether mergers and acquisitions are used as means of minority expropriation. We find, using a sample of M&A transactions undertaken between 2000 and 2007, that Swedish M&A create value for acquiring firm shareholders, measured as CAR. Uncontested firms make worse acquisitions at the expense of other shareholders in order to extract private benefits. A discrepancy between voting and cash flow rights does not seem to lead to value destroying M&A, although several firms make use of separation through control enhancing devices in order to reach an uncontested position. Moreover, the market anticipates a family controlled firm to maximize firm value to a larger extent and expropriate the minority to a lesser extent than a non-family controlled firm.