Mergers, Acquisitions and Restructuring: Types, Regulation, and Patterns of Practice

Mergers, Acquisitions and Restructuring: Types, Regulation, and Patterns of Practice

John Coates

Series number :

Serial Number: 
260/2014

Date posted :

August 01 2014

Last revised :

August 15 2014
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Keywords

  • Mergers • 
  • acquisitions • 
  • restructuring • 
  • Corporate Law and Governance • 
  • corporate law • 
  • Securities Law • 
  • Listing Standards • 
  • Antitrust and Foreign Investment Law
An important component of corporate governance is the regulation of significant transactions ? mergers, acquisitions, and restructuring. This paper (a chapter in Oxford Handbook on Corporate Law and Governance, forthcoming) reviews how M&A and restructuring are regulated by corporate and securities law, listing standards, antitrust and foreign investment law, and industry-specific regulation.
Drawing on real-world examples from the world?s two largest M&A markets (the US and the UK) and a representative developing nation (India), major types of M&A transactions are reviewed, and six goals of M&A regulation are summarized ? to (1) clarify authority, (2) reduce costs, (3) constrain conflicts of interest, (4) protect dispersed owners, (5) deter looting, asset-stripping and excessive leverage, and (6) cope with side effects. Modes of regulation either (a) facilitate M&A ? collective action and call-right statutes ? or (b) constrain M&A ? disclosure laws, approval requirements, augmented duties, fairness requirements, regulation of terms, process and deal-related debt, and bans or structural limits. The paper synthesizes empirical research on types of transactions chosen, effects of law on M&A, and effects of M&A. Throughout, similarities and differences across transaction types and countries are noted. The paper concludes with observations about what these variations imply and how law affects economic activity.

Authors

Real name: 
Fellow, Research Member
Harvard Law School / Harvard Business School