Economic Liberalization and Changes in Corporate Control in Latin America

Abstract

This article analyzes ownership restructuring and changes in corporate control in four large Latin American countries—Argentina, Brazil, Chile, and Mexico—during the 1990s. Drawing on original firm‐level data, this is a comparative study aimed at identifying cross‐country differences and regularities. It focuses on transactions associated with privatizations and private mergers and acquisitions (M&As)—their evolution, relative importance, and sectoral incidence—as well as the role played by different types of investors: local, foreign, and joint ventures. A specially built database was used in the analysis, comprising 3,085 private M&As and 329 privatization transactions. Although similar to processes occurring elsewhere, it is argued that ownership restructuring in Latin America was facilitated and fostered by specific changes in policy‐associated institutional framework conditions. That is, the wide‐ranging process of ownership restructuring is strongly associated with economic liberalization, which has become the main feature of Latin American national regimes of incentives and regulation.

Leviathan as a Minority Shareholder: Firm-Level Implications of State Equity Purchases

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The Unusual Case of the Discount Offers for Taking the Control: Evidence from Romania

“…However, Barclay and Holderness (1989) notice that the controlling position determines an undiversified portfolio, thus inducing a cost of control. Another explanation for the existence of discount transaction can be that ownership is in a permanent restructuring in developing economies, so private investors simply give up the shares at a lower market price and seek for another opportunity that can bring them a higher profitability (De Paula et al, 2002). Still, these cases seem to be exceptions.…”

The New Brazilian Economy

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