Corporate control and M&A activity: the role of the largest shareholder’s voting stake

Timm Gödecke and Dirk Schiereck

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: This study finds a negative relationship between the voting stake of the largest shareholder and M&A likelihood, utilizing a large sample of 814 publicly listed firms. We argue that large shareholders hold hardly diversified portfolios and are therefore often very risk-averse and actively monitor management to prevent inefficient investments, resulting in lower acquisition activity. Results further indicate that family firms do not deviate from non-family firms in their acquisition behavior, which contradicts the socioemotional wealth theory. Overall, our main contribution is to provide evidence that the reintroduction of multiple-vote shares proposed by the European Commission in 2022 may lead to a decrease in M&A activity and thus hinder economic growth.

Date: 2025-06-27
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Published in The European Journal of Finance 12 (2025-06-27) : pp. 1551-1575

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:159011

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