“Death becomes her”: Market reaction to the death of controlling inside blockholders

The death of a controlling inside blockholder triggers market expectations of possible changes in corporate control, which would extend the control premium to minority shareholders under the European Equal Opportunity Rule (EOR). Using data from Italy (1992–2023), we find cumulative average abnormal returns around the death announcement of +4.3 % over [−5,+1] and +3.6 % over [−1,+1]. Reactions are negligible when the deceased held a non-controlling stake, and stronger when a second relevant blockholder is present. We find no evidence of a stronger reaction for older blockholders or firms with weaker performance or valuation. Within 10 years, over one-third of firms formerly controlled by the deceased undergo a control transition, typically via tender offer under the EOR. Succession does not lead to ownership dispersion, but rather preserves or further concentrates control.