Families, ownership structures, and acquisition decisions

We investigate how the controlling shareholder's identity influences the decision to take part to an M&A deal, both as an acquirer and as a target. We study a comprehensive sample of 777 Continental European companies in the period 1998-2002. These firms launched 1,398 acquisitions worldwide. More than half of the sample firms (405) made at least one acquisition, and 206 firms changed owner or were taken private by their controlling shareholders. Family firms are less likely to make acquisitions, even after controlling for the size effect. However, they do not outperform non-family firms when they acquire other firms. We also document that family firms are as likely as non-family firms to be acquired. Finally, we find an inverse listing effect: abnormal returns are higher when the target is public