Essays on Cross-National Variations in the Market for Takeovers Coursework

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The paper "Cross-National Variations in the Market for Takeovers" is a good example of business coursework.   France, Germany, and Japan are usually regarded as ‘ coordinated market economies’ (CMEs) as financial systems, corporate ownership, inter-firm networks, as well as industrial relations demonstrate a greater level of coordination. On the other hand, the United State and the United Kingdom are often regarded as ‘ liberal market economies’ (LMEs) as transactions in these two countries tended to be market-driven (Jackson & Hideaki 2007). In this case, variations in ownership concentration imply that mergers and acquisitions have to be negotiated with key shareholders in CME countries (Schneper & Guillen 2004).

Similarly, banks in Japan and German tend to provide support to management in the event of hostile bids. At the same time, few investors would show the willingness to provide funds for seemingly risky or opportunistic takeovers (Chui 2011). This essay discusses the statement: “ the presence of cross-national variations in the market for takeovers reveals the significant levels of legal protection for minority investors in the United Kingdom and the United States. ” The statement can be discussed by focusing on triangular mergers, schemes of arrangement, and tender offers.

Additionally, the primary focus is on the manner in which two common law jurisdictions, the United Kingdom and the United States regulate takeover transactions. It is argued that the statement means that cross-national variations have allowed for countries to establish their own legislation to govern takeovers and that the United States and the United Kingdom have tended to focus on protecting minority investors or shareholders from possible detriment in the event of opportunistic takeovers. Takeover transactions Takeover transactions are significant activities that affect companies and their shareholders.

For that reason, there is an ongoing public discourse regarding the value and implication of takeovers in addition to the degree to which such transactions should be regulated. One sure topical issue for regulating takeovers is the potential implication of takeovers on minority shareholders (Roe 2002). According to Afsharipour (2016), emphasis on minority shareholders is expected, as research has suggested that laws that protect minority shareholders should be linked to more strengthened financial markets. A number of institutional factors explain the reasons for cross-national variations in takeover events.

For instance, mergers and acquisitions (M& A) tend to be greater in situations in which there is a higher level of legislation that protects investors, including laws protecting shareholder rights (Hall & Soskice 2001). Additionally, M& A also tends to be higher in countries that have concentrated ownership, given that transfers of control tend to be more convenient. On the other hand, ownership concentration is seen as a major obstacle against hostile takeovers and may often assist M& A in occasions in which concentrated owners show the willingness to sell.

Lastly, M& A is assisted in countries that have legal protection for employees, such as the low level of rights against dismissal. In both the United States and United Kingdom countries, regulators, policymakers, and courts attempt to attend to the likely for detriment to minority shareholders. On some occasions, regulators have come up with divergent rules to guide different sets of transaction structures (Callaghan 2012). Such rules usually offer dissimilar levels of rights for shareholders of targets and bidders. They also differ depending on the type of transaction structure (Szentkuti 2007).

Reference

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Afsharipour, A 2016, Deal Structure And Minority Shareholders, Cambridge University Press, Cambridge, viewed 6 Jan 2016, http://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=1090&context=law_econ>

Callaghan, H 2012, "Economic Nationalism, Network-based Coordination, and the Market for Corporate Control Motives for Political Resistance to Foreign Takeovers," MPIfG Discussion Paper 12/10

Capron, L & Guillen, M 2009, “National Corporate Governance Institutions and Post-Acquisition Target Reorganization,” Strategic Management Journal, vol 30 no8, pp.803-833

Chui, B 2011, "A Risk Management Model for Merger and Acquisition," International Journal of Engineering Business Management, Vol. 3, No. 2, pp 37-44

Coates, J 2014, "Mergers, Acquisitions And Restructuring: Types, Regulation, And Patterns Of Practice," Harvard Law School Discussion Paper No. 78107/2014

Frederikslust, R, Ang, J & Sudarsanam, P 2007, Corporate Governance and Corporate Finance: A European Perspective, Routledge, New York

Hall, P & Soskice, D 2001, “An introduction to varieties of capitalism”, in ibid, eds., Varieties of Capitalism: The institutional foundations of competitiveness, Oxford University Press, Oxford

Ipekel 2004, "A Comparative Study of Takeover Regulation in the UK and France," A Thesis Submitted to the Department of Law of the London School of Economics and Political Science for the Degree of Doctor of Philosophy

Jackson, G & Hideaki, R 2007, "Varieties of Capitalism, Varieties of Markets: Mergers and Acquisitions in Japan, Germany, France, the UK and USA," RIETI Discussion Papers Series, June 2007

Kuipers, D, Miller, D & Patel, A 2003, The Legal Environment and Corporate Valuation: Evidence from Cross-Border Takeovers, viewed 6 Jan 2016,

Maher, M & Andersson, T 2007, "Corporate Governance: Effects On Firm Performance And Economic Growth," Organisation For Economic Co-Operation And Development, viewed 6 Jan 2016, https://www.oecd.org/sti/ind/2090569.pdf

Offenberg, D & Pirinsky, C 2012, How do Acquirers Choose between Mergers and Tender Offers?, viewed 6 Jan 2016,

Raftery, C 2004, The “means and ends” of regulating barriers to takeover bids, College Of Europe Bruges Campus Department Of Legal Studies

Roe, M 2002, “Corporate Law’s Limits,” Discussion Paper #380, Harvard John Olin Center for Law, Economics, and Business, viewed 6 Jan 2016, http://www.law.harvard.edu/programs/olin_center/papers/pdf/380.pdf

Schneper, W & Guillen, M 2004, “Stakeholder Rights and Corporate Governance: A Cross-National Study of Hostile Takeovers,” Administrative Science Quarterly, vol 49 no 2, pp.263-295.

Szentkuti, D 2007, “Minority shareholder protection rules in German, France and in the United Kingdom," Central European University, March 2007

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