This topic contains 6 replies, has 7 voices, and was last updated by 1 month, 1 week ago.
July 28, 2021 at 8:26 am #121436
The fact that you would see the hostile takeovers more common in the US, is it because of how Capitalism is structured there? Or is it Cultural ( Survival of the fittest?)July 28, 2021 at 1:09 pm #121442
Michael Maggiotto JrParticipant
The premise of your question, @dossrh0f, implies a false choice between only 2 alternatives – capitalism or culture. Further, it assumes that hostile takeovers are more common in the US yet does not state a comparison geography. What is your source on that last point – is it anecdotal or derived from reputable research – and to what geography are you comparing the volume of hostile takeovers?
There are many reasons a company may engage in a hostile takeover that may not have anything to do with the economic system or national culture. Ultimately, there must be a thesis for the transaction. Regardless of economic system or culture, if the merger is bad business, it’s bad business and companies wouldn’t engage in a hostile takeover exclusively because they feel the economic system or national culture compels them to do so. If a hostile takeover occurs, it is likely driven by 2 core factors – corporate management feels it is the best way to achieve the transaction thesis AND the legal landscape provides vehicles to perform a hostile takeover at an acceptable risk level to the acquiring company. Barring those two conditions, the vast majority of hostile takeovers likely would not occur. Neither has anything to do with economic system or national culture.
Perhaps a better phrasing of your question might be, “What are some of the most common reasons for hostile takeovers in the US?” If you want to assert that hostile takeovers occur more frequently in the US than somewhere else, it is recommended that you cite the source and the comparison geography. Though I cannot speak for everyone on the site, I certainly would want to double check and validate to confirm.
August 3, 2021 at 3:45 pm #121534
- This reply was modified 1 month, 3 weeks ago by mmaggiotto.
I am not sure if the number of hostile takeovers in US is higher than other regions but I would believe that the laws and regulations governing M&A in one region/country would be one factor that need to be looked at when comparing the number of hostile takeovers between two countries.August 6, 2021 at 7:58 am #121607August 6, 2021 at 8:50 am #121609
US economic power combined with the need to achieve global dominance of US are in my opinion other reasons.August 7, 2021 at 8:55 pm #121621
Laura Manganotti MillsParticipant
The number of deals in the US give also more opportunities for hostile takeover scenarios.August 9, 2021 at 12:51 pm #121641
Ownership is an important aspect here too, privately owned entities are more common in some jurisdictions and less prone to hostile takeover as not governed by the same legal principles. Some markets have very high levels of entities which are listed, Japan for example, whereas private ownership is still very common in other equally mature markets.
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