Two Sides of the Same Coin:
 Family Firms and the Performance of Acquisitions and Divestitures

This paper explores how the characteristics of both the acquiring and divesting firms in a given transaction affects the acquiring and divesting firms’ performance. Using family firms as the context, this paper documents that the shareholder returns to acquiring firms are highest when family firm acquirers buy businesses from non-family firm divesters, and the shareholder returns to divesting firms are highest when family firm divesters sell businesses to non-family firm acquirers. These findings reveal that it is necessary to consider the characteristics of both the acquiring and divesting firms in a given acquisition or divestiture when evaluating each firm’s financial performance, and that family firm shareholders only gain economic value in acquisitions or divestitures where their counterparties are not also family firms.

Should you want to attend this talk, please register by sending a message to Thinley Tharchen at: tharchen@em-lyon.com. We will send you a copy of the paper and order a free sandwich for you (please mention any dietary preference).