This paper examines the impact of large acquirer shareholders on M&A value effects for 342 European takeovers completed in 1997–2007. Family-controlled firms on average generate more positive M&A value effects than other firms. Market participants thus seem to appreciate the long-term investment horizon typically held by controlling families in European listed firms. Interestingly, we show that this positive family effect is not related to a more efficient monitoring of management, since family owners cannot curb the negative association between managerial hubris and M&A value effects. In addition, the positive family effect disappears in industry-diversifying acquisitions, which implies that family owners in Europe may use corporate diversification to pursue diversification of the family wealth. Large institutional owners can curb managerial hubris, yet acquirers controlled by institutional block holders can never outperform family-controlled acquirers
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