Hostile Takeovers and Hostile Defenses: A Comparative Look at U.S. Board Deference and the European Effort at Harmonization


The United States and the European Union have taken very different approaches in dealing with tender offers, especially in respect to the amount of power the board of directors has to block an unwanted takeover attempt. The United States has no single set of guiding principles regarding most of substantive corporate law and the field of tender offers is no different. The European Union, on the other hand, has very recently passed legislation that not only attempts to harmonize the corporate takeover laws of all its member states, but seeks to restrict the power of the board of directors. The European Union passed the 13th Directive on Takeovers after much debate and previous failure. Although the European Union required its member states to implement this legislation by May of 2006, only a handful of nations have actually met this goal, leaving the true effectiveness of this harmonization effort in doubt. This paper analyzes not only these different approaches of regulating corporate takeovers and the tender offer process, but also explores alternative theories of governance in order to better understand how we got to where we are and to best predict where we are headed in the future.


Business Organizations Law | Comparative and Foreign Law | International Law

Date of this Version

October 2006