Partial-control versus full-control acquisitions: Does target corporate governance matter? Evidence from eight East and Southeast Asian countries

In this paper, we expand the understanding of majority acquisitions from the target firm's perspective by testing whether target corporate governance mechanisms can explain the trade-off and outcomes between partial-control and full-control acquisitions across eight East and Southeast Asian countries. We find that bidders tend to prefer partial-control acquired targets with more independent directors, powerful CEOs, and higher block-shareholdings regardless of the target country's economic development level. These governance characteristics also lead to a lower likelihood of achieving actual equity acquisitions compared to unmatched ownership outcomes. Our results support the supply-oriented view that targets are generally reluctant to give up corporate control until the activation of a compulsory acquisition clause. Our findings are also robust to variations in the imposed acquisition threshold in each country.