Private Equity Acquisitions of Continental European Firms: the Impact of Ownership and Control on the Likelihood of Being Taken Private


  • Part of this paper was written while Bastian Hinterramskogler was a visiting scholar at the Saïd Business School, University of Oxford. Financial support from the European Corporate Governance Training Network (ECGTN) and the German Academic Exchange Service (DAAD) is gratefully acknowledged. We thank Maximilian Sigel for excellent research assistance, and an anonymous referee, John Doukas (the editor) and participants at the EFM Symposium ‘Corporate Governance and Control’ (University of Cambridge) and the 7th International Conference on Corporate Governance (Birmingham Business School, winner of Best Paper) for valuable comments. Correspondence: Bastian Hinterramskogler.


This paper studies the motives behind private equity acquisitions of publicly listed firms in continental Europe. As corporate control and ownership in continental Europe tend to be highly concentrated, we argue that it is important to take into account the incentives of the incumbent large shareholder to monitor the management and the private benefits of control the latter may derive from the firm when measuring the likelihood of the firm being taken over by a private equity investor. We find strong and consistent evidence that both have a significant impact on the likelihood of a private equity acquisition.