Abstract

A growing body of researchers has turned their attention to the roles and issues of family-businesses (FB) involved in M&A transactions. However, literature has so far been very limited to the perspective of the FB being the target of an acquisition or concerned with an adequate exit strategy, e.g., in form of a sale. The lack of empirical evidence on FBs' inorganic growth strategies is surprising for two reasons. First, the continued influence of families among firms and corporations, also in developed markets, has been well documented and second, other frequently cited differences between FBs and non-family-businesses (NFB) may be the source of a significantly altered strategic posture and performance of FBs: Family-affiliated firm owners are argued to be investors with usually poorly diversified portfolios. They are said to be long-term oriented (over multiple generations), often control senior management positions, and frequently continue to hold significant equity stakes after retirement when they relinquish active control to agents.

These unique characteristics may significantly affect the M&A performance of FBs. The research question focused upon in this study is twofold: (1) Are those acquisitions, where FBs are bidders, value enhancing from a bidding firm’s shareholder perspective and (2) are FBs regarded as better performers than NFBs?

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