Some Overlooked Ethical Issues in Acquisitions and Mergers

10 Pages Posted: 4 May 2004

See all articles by Robert W. McGee

Robert W. McGee

Fayetteville State University - Department of Accounting


The merger mania of the 1980s put top corporate management on the defensive as predators sought takeover targets. Hostile takeover activity has dissipated in recent years, for a variety of reasons, but the ethical issues surrounding acquisitions and mergers and the ethically questionable conduct that is often involved remain as relevant as ever. Most ethical discussions of acquisitions and mergers focus on the ethical conduct of the predator. The ethical conduct of the target company's top management is often overlooked. This paper reviews the ethical literature on hostile takeovers and applies ethical theory to some of the defensive tactics that have been used to thwart unwanted takeovers. The focus will be on the fiduciary duties of top management and ethical issues involved with poison pills, greenmail, golden parachutes and other defensive tactics. Both utilitarian and nonutilitarian approaches will be used as tools of analysis.

Keywords: ethics, acquisitions, mergers, poison pill, greenmail, golden parachute, utilitarianism, welfare

JEL Classification: G34, D63, G34, K22

Suggested Citation

McGee, Robert W., Some Overlooked Ethical Issues in Acquisitions and Mergers. Available at SSRN: or

Robert W. McGee (Contact Author)

Fayetteville State University - Department of Accounting ( email )

Fayetteville, NC 28301
United States


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