Background Note | HBS Case Collection | 2005

Dual Class Share Companies

by Samuel L. Hayes III, Lynn S. Paine and Christopher Bruner

Abstract

Provides a brief historical overview of dual class share companies in the United States, focusing on the New York Stock Exchange's evolving position on dual class structures since the 1920s, the impact of hostile takeovers on their use since the 1980s, and recent perspectives on their utility and appropriateness. Concludes with a brief discussion of the role of dual class structures in recent debates over Europe's takeover laws.

Keywords: Acquisition; Debates; Capital Structure; Equity; Business History; Law; Organizational Structure; Business and Shareholder Relations; Perspective; Europe; United States;

Format: Print

10 pages

Purchase

Citation:

Hayes, Samuel L., III, Lynn S. Paine, and Christopher Bruner. "Dual Class Share Companies." Harvard Business School Background Note 306-032, August 2005.

In 2006 the French bank Crédit Agricole bought the Greek Emporiki bank, for €2.8 billion, at the peak of a bull market for bank takeovers. Six years, a major financial crisis, and €5.2 billion of losses later, in a context of great uncertainty in the European banking sector, what decision should Crédit Agricole take regarding Emporiki? Through the example of this European cross-border acquisition the case looks at the Greek banking system before and during the unprecedented Greek sovereign debt crisis; the efforts of Greece and the main actors of the European financial system to prevent the embattled country from having to exit the Euro zone; and the potential scenarios for Greek banks in mid-2012.

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