Takeovers and Takeover Policy: in David Bailey, Keith Cowling, and Philip Tomlinson (eds), New Perspectives on Industrial Policy for a Modern Britain

This chapter explores the literature on the market for corporate control and takeovers before offering some suggestions as to how takeover policy might be developed in the UK context. The chapter examines the dynamics of takeovers and mergers by charting six great historical takeover ‘waves’. It examines why takeover waves occur, and why they rise and fall. It then examines the market for corporate control in civil law and non-civil law countries before discussing the determinant of share prices, the market for corporate control, and nature of the takeover mechanism. It finishes by examining the recent debates on takeover policy stimulated by the Cadbury and AstraZeneca cases, before offering some suggestions as to how takeover policy might be developed through ‘throwing some sand’ in the wheels of the takeover machine and the adoption of a new ‘Public Interest Test’.