Comparative analysis of takeover defenses in strong and weak economies : the paradigm of the UK and Greece

Abstract

Purpose: The present paper analyses the interaction between takeover defenses and the strength of the economy in two countries, the United Kingdom (UK) and Greece. Both have implemented the EU Takeover Directive in their jurisdictions but have significant differences in the characteristics of their economies. Design/Methodology/Approach: A brief description of takeovers and potential takeover defenses is provided, followed by the presentation of the two countries’ economic market highlighting the factors that have led to two separate market structures. Subsequently, a thorough comparative discussion is presented on the different application of takeover defenses in the UK and Greece in relation to their economic and market characteristics with reference to the European Union harmonization. Findings: The UK is considered a strong economy operating in a market for corporate control with dispersed ownership structure, therefore takeover defences are encountered regularly, whereas Greece is viewed as a weak economy operating in a premature non-contestable market with concentrated ownership structure and thus, takeover defences are less encountered. Practical Implications: The comparative research on takeover defenses between these two countries aims to promote the understanding of the operation of takeover defenses in economies with differences in strength, especially within the concept of EU harmonization. The analysis also, aims to offer further knowledge on the way economic growth and market structure characteristics influence takeover defenses and vice-versa. Originality/Value: Moreover, it provides a framework for the consideration of the consequences in the light of UK exiting the EU as well as for the potential policies to be implemented both in the UK and in the EU.