S-Space College of Business Administration/Business School (경영대학/대학원) Dept. of Business Administration (경영학과) Seoul Journal of Business Seoul Journal of Business Volume 15, Number 1/2 (2009)
The Effect of Target Ownership Structure in the Wealth Gains in Owner-Manager Dominant Acquisitions: Evidence from Korean Cases
- Cho, Seong-Ho
- Issue Date
- Seoul Journal of Business, Vol.15 No.1, pp. 39-64
- mergers and acquisitions; ownership structure; governance structure; agency problem; managerial entrenchment; chaebol; owner manager
- This paper examines how the distribution of target ownership is
related to the wealth gains of target shareholders in owner-manager??
dominant acquisitions, in which a firm is managed by managers and
directors nominated and closely directed by controlling shareholders.
Using the Korean case of mergers and acquisitions during 1996-2007,
we find that the agency problem exists between owner-managers and
non-controlling shareholders. This finding is different from what we can
observe in the US case, where the agency conflict between managers
and shareholders is more crucial. In the meantime, the effect of the
bidders top 30 chaebol membership on the wealth of target
shareholders is inconclusive. In order to resolve the agency problem, the
presence of institutional shareholding may be effective.