The interdependency of cash flow rights and voting rights on post-acquisition value

Although acquisitions rarely deliver the anticipated value acquiring firms estimate, it remains a popular strategy for growth. We draw upon agency theory to investigate two types of stakes acquiring firms can obtain during an acquisition to ensure greater post-acquisition value – voting rights and cash flow rights. Using domestic acquisition data in Japan over 12 years to test our hypotheses, we find that greater voting rights directly improve value creation and positively moderate the effect of cash flow rights to improve acquiring firm value. This study sheds light on the strategic mechanisms crucial for post-acquisition integration value creation, and highlights acquisition strategies.