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We identify important conflicts of interests among shareholders and examine their effects on corporate decisions. When a firm is considering an action that affects other firms in its shareholders' portfolios, shareholders with heterogeneous portfolios may disagree about whether to proceed. This effect is measurable and potentially large in the case of corporate acquisitions, where bidder shareholders with holdings in the target want management to maximize a weighted average of both firms' equity values. Empirically, we show that such cross-holdings are large for a significant group of institutional shareholders in the average acquisition and for a majority of institutional shareholders in a significant number of deals. We find evidence that managers consider cross-holdings when identifying potential targets and that they trade off cross-holdings with synergies when selecting them. Overall, we conclude that conflicts of interests among shareholders are sizeable and, at least in the case of acquisitions, affect managerial decisions.

"For scholars wanting to understand organisational learning, especially in the context of corporate acquisitions, Ilaria Galavotti has written an outstanding comprehensive guide that spans strategic decision-making and learning literatures to examine acquisition value creation as part of corporate strategy. She nicely details the literatures of acquisition experience and acquisition learning, which includes methodological approaches. Accordingly, her book becomes a 'must-read' for scholars wanting to fully understand research in this important area."--Jerayr John Haleblian, Associate Professor, University of California-Riverside, and Adjunct Associate Professor, University of Georgia, USA "Ilaria Galavotti offers us an eloquent review--and remarkably erudite interpretation--of the burgeoning literature on learning in the context of acquisitions. Replete with theoretical insights, interdisciplinary connections, and philosophical considerations, one is hard-pressed to imagine a more fruitful exposition of this topic. An impressive accomplishment." --Mario Schijven, Assistant Professor of Business Administration, University of Illinois at Urbana-Champaign, USA This book analyses mergers and acquisitions within the broader framework of strategic decisions. Existing studies on corporate acquisitions have produced a variegated and inconclusive spectrum of findings on the strategic mechanisms that contribute to value creation. By building on the widespread recognition that firms substantially differ in their ability to carry out successful acquisitions, this book focuses on the diverse effects of experiential learning. A unique systematic literature review is provided, which thematically highlights the connections between various streams of research. The author aims to systematise our knowledge on experience and learning dynamics in corporate acquisitions, providing a detailed analysis of conceptual implications and presenting potential avenues for future exploration. Ilaria Galavotti is a Postdoctoral researcher in Management at the Universit̉ Cattolica del Sacro Cuore, Italy. Her research focuses on corporate strategy, mergers and acquisitions, organisational learning, and the role of firm experience. She has published articles in refereed journals and regularly presents her research at international academic meetings