Dual-class firms, M&As and SOX

Abstract

Abstract By analyzing a large sample of M&A deals undertaken by domestic dual-class acquirers in the United States (1996–2009), this study finds that deals were more value-enhancing for acquiring firm shareholders, both in the short- and long-term, in the aftermath of the passage of the Sarbanes-Oxley Act (SOX). This study provides evidence that the transparency measures mandated by SOX had positive and tangible incremental benefits evidenced by enhanced performance by supposedly ‘poorly governed’ dual-class acquirers relative to their single-class counterparts.