An Overview of Takeover Defenses and the Characteristics of the Economy

Isidora Tachmatzidi

International Journal of Finance, Insurance and Risk Management, 2020, vol. 10, issue 4, 40-49

Abstract: Purpose: The present paper offers an overview of takeover defenses and an analysis of the way in which economic structures and characteristics may influence the presence of takeovers and takeover defenses. Design/Methodology/Approach: A brief definition of takeovers and takeover defenses is presented, followed by a thorough analysis of the different types of takeover defenses, frustrating and defensive actions. Then, there is an analysis of the economic structures and characteristics that may influence the employment of takeovers and defenses as well as their in-between interaction. Findings: In economies which have dispersed ownership structures, contestability and higher investment strategies more hostile takeovers tend to occur and consequently, takeover defenses, whereas economies in which ownership is more concentrated takeovers are not employed frequently. Practical Implications: The present article aims to offer a clarification on the interaction between takeover defenses and characteristics of the economy. Also, the analysis indicates the importance of the regulatory framework regarding these issues, taking into consideration the differences in the structure of the economies. Originality/Value: It provides the framework to develop potential regulation and policies regarding takeovers and takeover defenses in order to promote EU harmonization and global cooperation.

Keywords: Takeovers; takeover defenses; legal framework; economy structure; hostile takeovers; frustrating actions; defensive actions; market for corporate control; ownership structure; EU; Eurozone; Brexit; dispersed structure; concentrated structure; contestability; strong economy; weak economy; privatisation; investments. (search for similar items in EconPapers)
JEL-codes: K10 K20 K22 K23 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ers:ijfirm:v:10:y:2020:i:4:p:40-49

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