재무연구 제 권 호 (2008년 5월)
Asian Review of Financial Research, Vol., No..
pp.1144~1181
pp.1144~1181
Investor Protection and the Mode of Acquisition : An Implication for the Formation of Pyramids
Woojin Kim Assistant Professor of Finance at Korea University Business School, Seoul, South Korea.
This paper investigates whether the level of investor protection affects the choice between a full scale merger and a purchase of a controlling stake in an acquisition, and examines the consequences of these decisions on target shareholders’ welfare. Using a sample of 10,402 acquisitions from 38 countries between 1990 and 2003, I find that targets from countries with poor investor protection are more likely to be acquired through a ‘control stake acquisition’ than a ‘merger’ thereby creating inter-corporate control chains. The returns to target minority shareholders in low protection countries are significantly positive in both ‘control stake acquisitions’ and ‘mergers’, but they are substantially lower than those found in countries with high investor protection.
Woojin Kim
This paper investigates whether the level of investor protection affects the choice between a full scale merger and a purchase of a controlling stake in an acquisition, and examines the consequences of these decisions on target shareholders’ welfare. Using a sample of 10,402 acquisitions from 38 countries between 1990 and 2003, I find that targets from countries with poor investor protection are more likely to be acquired through a ‘control stake acquisition’ than a ‘merger’ thereby creating inter-corporate control chains. The returns to target minority shareholders in low protection countries are significantly positive in both ‘control stake acquisitions’ and ‘mergers’, but they are substantially lower than those found in countries with high investor protection.
