The last ten years have witnessed a significant restructuring in much of the American corporate sector, with the economic value of merger and acquisition activity totalling nearly $180 billion for both 1985 and 1986. The magnitude of these activities has attracted considerable attention and the empirical evidence clearly indicates that the shareholders of target firms benefit substantially from successful takeovers, with virtually no gains for the shareholders of acquiring firms. An important aspect of this phenomenon is the source of these gains. Specifically are these the synergistic gains of economic efficiency or do they represent at least in part a redistribution of firm value from organizational stakeholders to shareholders? This study provides a direct test of the hypothesis that some of these shareholder gains come at the expense of unionized labor. Given prior work establishing that union wage and benefit premia come at the expense of shareholders, a change in corporate control is one more issue that enters the relationship between labor and management over the distribution of firm value. The first part of the study will test the hypothesis about the distribution of shareholder gains based on the merger and acquisition experience of 468 publicly traded firms from 1982-86. A unique unionization database is developed at the firm level based on information available from the U.S. Treasury/ Department of Labor. The second part of the project will include a case study of 5 - 10 firms in the sample.
