Corporate Takeover Targets

1Economic and Legal Framework of Takeover Bids in Europe

Takeover bids are operations that change the ownership of a business, usually resulting in a change in the management and strategy of the latter. The acquisition of giant companies destabilizes the functioning of targets and frequently affects its employees. It undermines the authorities and poses the problem of the role and rights of shareholders. Statutory and regulatory measures are put into place by financial market authorities to enable the smooth running of these transactions and to ensure the protection of rights of shareholders involved in this process.

The practice of takeover bids has been developed in Europe since the mid-1980s and had increased by the end of this period. Thus, after relative stability in the mid-1990s, a new rebound was observed at the end of this decade. The Internet bubble burst in 2000 resulted in a relative stagnation of the phenomenon before being revived over the course of 2003. However, mergers between giants can also have consequences, in terms of consumer interest, because of monopoly. Are M&A controlled in Europe? What about national regulations and their harmonization?

Before giving answers to these questions, we present in the first section a general approach to the term “takeover”. In the second section, we will present the economic impact of takeover bids in the global economy, while stating the importance of the phenomenon in Europe and the United States. The third section shall ...