Analysis of a Merger from a Governance Perspective: The Case of Abitibi‐Consolidated and Donohue

Details

Serval ID
serval:BIB_CD97ED59FDB5
Type
Article: article from journal or magazin.
Collection
Publications
Title
Analysis of a Merger from a Governance Perspective: The Case of Abitibi‐Consolidated and Donohue
Journal
Canadian Journal of Administrative Sciences / Revue Canadienne des Sciences de l'Administration
Author(s)
André P., Magnan M., St-Onge S.
ISSN
0825-0383 (Print)
1936-4490 (Electronic)
Publication state
Published
Issued date
06/2008
Peer-reviewed
Oui
Volume
25
Number
2
Pages
153-169
Language
english
Abstract
Adopting a governance perspective, this study analyzes the merger between closely-held Donohue Inc. and widely-held Abitibi-Consolidated Inc. Findings suggest that the absence of a controlling shareholder and weak board governance at Abitibi might explain both (a) its executives' interests in the transaction and (b) its CEO's compensation increase despite underperformance. Second, an intergeneration shift of control at Quebecor (Donohue's parent company) led to a strategic reorientation that (a) transformed Donohue into a target and (b) insured that Donohue's executives had incentives to pursue a deal. Finally, Donohue's noncontrolling shareholders benefited from the transaction while Abitibi shareholders experienced wealth reduction. The merger's aftermath provides some counter evidence regarding blockholders' power in widely-held firms.
Keywords
Merger, Managerial compensation, Governance, Dual class shares, Pyramid structure
Web of science
Create date
29/04/2016 15:57
Last modification date
20/08/2019 15:48
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