Takeovers: English and American

Abstract

Viewed against the backdrop of European company law generally, the U.K. and U.S. systems of corporate governance are remarkably similar. However, there are several salient differences between the system, including the fact that the U.K. has a more robust and less regulated takeover market than the U.S. This paper explains the differences as a function of politics. In the United States, where corporate law is dominated by state governments, the political forces aligned against hostile takeovers are quite potent, generating legislation and judicial decisions that have suppressed takeover activity. In the United Kingdom, with a more unitary system, the political forces play out differently, and the system accordingly generates rules more accommodating to unfriendly takeovers.

Keywords: Takeovers, Corporate Governance, Politics, Comparative Law

JEL Classification: G34, G39