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Corporate governance, performance and take-overs: an empirical analysis of UK mergers.

Weir, Charlie


Charlie Weir


This paper analyses the relationship between the probability of being acquired, firm performance and governance structures. The acquired firms were all fully quoted on the London Stock Exchange and the acquisitions took place between 1990 and 1993. They were matched by a sample of non-acquired quoted companies. The sample was also analysed in terms of hostile and non-hostile acquisitions. It was found that the key governance characteristics which differentiated between acquired and non-acquired corporations related to the proportion of non-executive directors on the board and to whether or not the roles of chief executive officer and chairman were combined. It was also found that acquired firms were poor performers, which suggests that the internal governance structures had been ineffective. These results applied to hostile and non-hostile targets. The findings support the view that hostile acquisitions are disciplinary but cast doubt on the claim that non-hostile acquisitions are purely synergistic. The results also support the view that certain governance characteristics are effective substitutes for the take-over mechanism as a means of minimizing discretionary behaviour.


WEIR, C. 1997. Corporate governance, performance and take-overs: an empirical analysis of UK mergers. Applied economics [online], 29(11), pages 1465-1475. Available from:

Journal Article Type Article
Acceptance Date Nov 1, 1997
Online Publication Date Nov 1, 1997
Publication Date Nov 1, 1997
Deposit Date Oct 14, 2016
Publicly Available Date Oct 14, 2016
Journal Applied economics
Print ISSN 0003-6846
Electronic ISSN 1466-4283
Publisher Taylor & Francis
Peer Reviewed Peer Reviewed
Volume 29
Issue 11
Pages 1465-1475
Keywords Corporate governance; Performance and takeovers; An empirical analysis of UK mergers
Public URL


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