Should Shareholders Have a Say on Acquisitions?
27 Pages Posted: 5 Mar 2021
Date Written: February 14, 2021
Shareholders of U.S. corporations have lost billions of dollars in acquisitions they never approved. In the United Kingdom the listing rules give shareholders a binding say when targets are large relative to acquirers. A transatlantic comparison suggests that if U.S. shareholders had a say on acquisitions, they would incur fewer losses. There is a significant difference in the difference in performance between deals subject to a vote in the United Kingdom but not in the United States and deals with no mandatory vote in either country. The United States has given shareholders a mandatory say on pay; shareholders might also wish to have a binding say on corporate acquisitions.
Keywords: Corporate acquisitions, shareholder voting, corporate governance
JEL Classification: G34, K22
Suggested Citation: Suggested Citation