“National” Interests and Takeover Law
BusinessWeek reports that the UK is considering reforms that would make it more difficult to take over UK companies. The UK has a liberal reputation in the takeover-law world, especially in comparison with the land of poison pills across the pond.
One concern is “foreign” companies taking over “UK” companies, although it is not really clear what these terms mean in the takeover context. These terms should relate to some idea of a “national” interest, such as the effect of takeovers on in-country jobs. A foreign takeover of a company is generally associated with layoffs at the target firm, so strong labor might equate to a strong anti-takeover regime. However, the UK has a decidedly stronger union culture than the US, so if that is what defines “national” interest as expressed in takeover laws, why would the UK have more liberal takeover laws in the first place?
Is what makes takeovers a matter of one jursidiction gaining an advantage at the expense of another the change in ownership from UK shareholders to foreign shareholders? If so, then why wouldn’t the advantage depend on whether, for example, UK shareholders of Cadbury received more than their shares were worth when they sold out to Kraft in 2010, rather than the direction of the takeover being the US over the UK? If it’s a truly “global” economy, why does the jurisdictional direction of takeovers matter? What, exactly, are the determinative “national” interests (or national “interest groups”) in the context of takeover laws?