Expert Insights on the motives and process of selling private family firms

This study examines private family firm owners’ motives for selling their firms to external (non-family) buyers. The study contributes to understanding of the sale process in the family business context. The study also contributes to the acquisitions literature by exploring the seller’s perspective in contrast to prior literature which has emphasized the buyer’s perspective. Data were collected through interviews with mergers and acquisitions experts and analyzed using qualitative content analysis techniques. Using socioemotional wealth as theoretical perspective, this study proposes that target family firm principals have motives to preserve their socioemotional wealth in their family firms even after they have sold the family firms to external buyers. Therefore, target family firm principals screen potential external buyers to select a buyer who is perceived as trusted steward to acquire the family firm. The theorizing and findings of this study also complement research on ownership transitions, management succession and business acquisitions and therefore constitutes an important contribution to the literature.
AOM 2017 Theme: At the Interface