SURVEYS AND CROSSOVERS: Value of Corporate Control: Some International Evidence
Paul Hanouna, Atulya Sarin and Alan C. Shapiro
Volume 11, Number 3, Third Quarter 2013
Existing literature shows that the market values control because controlling shareholder can generate private benefits and improve the efficiency of the corporation. In this study, we provide a measure of the value of control for a set of domestic and foreign transactions. Our measure of the value of control is the difference between the offer premium for minority and comparable majority transactions. We find that the median control premiums in the United States are around 30%. The control premium in market-oriented countries is higher than that for the bank-oriented countries. Also, we find that the premiums are lower in cross-border transactions relative to domestic transactions.