Takeovers: English and American

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Abstract

Viewed against the backdrop of European company law generally, the UK and US systems of corporate governance are remarkably similar. However, there are several salient differences between the system, including the fact that the UK has a more robust and less regulated takeover market than the USA, while the USA is more permissive towards derivative litigation. This paper explains the differences as a function of politics. In the USA, 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 UK, with a more unitary system, the political forces play out differently, and the system accordingly generates rules more accommodating to unfriendly takeovers.

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