268

# Acquire or get acquired

##### Defensive acquisitions in medium-sized family firms

Authored by: Pankaj C. Patel , David R. King

# The Routledge Companion to Mergers and Acquisitions

Print publication date:  July  2015
Online publication date:  June  2015

Print ISBN: 9780415704663
eBook ISBN: 9780203761885

10.4324/9780203761885.ch4

#### Abstract

Beyond economic and non-economic motives for acquisitions (Gorton et al. 2009; Haleblian et al. 2009), family firm research consistently shows that family firms engage in lower levels of diversification (Anderson and Reeb 2003b; Basu et al. 2009; Caprio et al. 2011; Gomez-Mejía et al. 2010; Miller et al. 2010; Sraer and Thesmar 2007). While acquisitions are complex events, according to Miller et al. (2010: 208), family firms’ unique social priorities and risk preferences lead to fewer acquisitions, such that “at 20 percent of family ownership, the average number of acquisitions is 1.55 with a value of $788MM; at 60 percent of family ownership these numbers decline to 1.03 and$28MM, respectively.” Research demonstrates limited consensus on the impact of family ownership on firms (O’Boyle et al. 2012). However, recent work on 777 large continental European firms confirms that family control is negatively related with acquisition propensity (Caprio et al. 2011). In the quest for preserving socioemotional wealth, family firms exhibit lower acquisition activity than non-family firms (Bauguess and Stegemoller 2008; Sraer and Thesmar 2007). Socioemotional wealth refers to “non-financial aspects of the firm that meet the family’s affective needs, such as identity, the ability to exercise family influence, and the perpetuation of the family dynasty” (Gomez-Mejía et al. 2007: 106).

## Use of cookies on this website

We are using cookies to provide statistics that help us give you the best experience of our site. You can find out more in our Privacy Policy. By continuing to use the site you are agreeing to our use of cookies.