We investigate the effects of family ownership on the choice between cash and stock payment in M&A operations. On a sample of 269 M&A transactions performed by Italian listed bidders over the period 2008–2015, we demonstrate that families are more inclined to pay in cash in order to avoid dilution. We also find that the influence of family ownership on the choice of the payment method is stronger for intermediate levels of control than for other levels. Furthermore, we document that financial structure considerations, bidder growth opportunities and deal specific characteristics influence the choice of payment method.
Family ownership and M&A payment method
Teti, Emanuele
;Dallocchio, Maurizio;
2022
Abstract
We investigate the effects of family ownership on the choice between cash and stock payment in M&A operations. On a sample of 269 M&A transactions performed by Italian listed bidders over the period 2008–2015, we demonstrate that families are more inclined to pay in cash in order to avoid dilution. We also find that the influence of family ownership on the choice of the payment method is stronger for intermediate levels of control than for other levels. Furthermore, we document that financial structure considerations, bidder growth opportunities and deal specific characteristics influence the choice of payment method.
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