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Published in:
2010 | OriginalPaper | Chapter
Minority Equity Ownership and Value Creation: The Role of Corporate Relatedness
Author : Friedel Drees
Published in: Motives for and Consequences of Minority Equity Purchases
Publisher: Gabler
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In contrast to takeovers and acquisitions, minority block purchases do not give the acquirer full control over the target firm. Hence, one should suppose that their potential for wealth generation is substantially lower. As new minority blockholders cannot exert full control over the target firm, the realization of wealth creating strategies such as the implementation of operating synergies or increased market power should be inherently limited compared to acquisitions of majority control stakes.