The M&A Operations as Source of Agency Problems on the Short-Term: the Relevance of Corporate Governance Mechanism

Giosi Alessandro, Caiffa Marco, Schina Davide

In this paper we study some interesting behavioural dynamics involving internal stakeholders of companies before, during or immediately after M&A operations. According to Agency Theory we suggest there could exist the possibility, and consequently the risk,  that executives use M&As as a tool to extract private benefits, even if Agency Theory does not explain all the results from the research carried out. Using the Event Study methodology, to calculate the Cumulative Abnormal Returns (CARs) we detected this potential risk. With the aim to detect private rent extraction during the value creation process our study consider also Share Buy-Back operations announced in the same year of M&A transaction.

Key-Words: Governance e controlli interni

Table 1 – Variables description

Table 2 – National or Cross-Border Transactions

Table 3 – Bidder’s share buy back

Table 4 – Regression results for windows 1-5

Table 5 – Regression results for windows 6-10

Table 6 – Regression results for windows 11-15