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An international study of shareholder protection in freeze-out M&A transactions

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  • Ouyang, Wenjing
  • Zhu, Pengcheng

Abstract

Freeze-out M&A transactions are those initiated by controlling shareholders to acquire minority shareholders' ownership in the firm. We compare international freeze-out mergers in 35 countries in merger premium, choice of payment, and completion probability. We find greater merger premium and probability of cash payment but lower deal completion rates in countries with stronger minority shareholder protection. Using detailed minority shareholder protection indexes, we find some evidence that the ex-post anti-self-dealing law enforcement is more important than the ex-ante anti-self-dealing law regulation in protecting minority shareholder value. Our study provides new evidence of minority shareholder protection in the setting of conflicts of interest between majority and minority shareholders.

Suggested Citation

  • Ouyang, Wenjing & Zhu, Pengcheng, 2016. "An international study of shareholder protection in freeze-out M&A transactions," International Review of Financial Analysis, Elsevier, vol. 45(C), pages 157-171.
    • Handle: RePEc:eee:finana:v:45:y:2016:i:c:p:157-171
    DOI: 10.1016/j.irfa.2016.03.011
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    More about this item

    Keywords

    Minority shareholder protection; Freeze-out M&A; International corporate governance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • F30 - International Economics - - International Finance - - - General

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