Death by a Thousand Cuts: The Hostile Bids Regime in Europe, 2004-2023

The E.U. Takeover Directive was passed twenty years ago with the main aim of fostering a single European takeover market. However, subsequent economic, political, legal, and corporate governance developments have hindered the Directive’s goal of enhancing the European market for corporate control. This paper outlines the pro-market climate surrounding the Directive’s inception, traces the subsequent changes in market dynamics and governance, and examines the legislative measures that have contributed to the current state of the market for corporate control in Europe. Despite the continued existence of hostile bids, their importance and impact has shrunk under the current environment. This trend has reduced firm dynamism and resulted in benefits for a select few (notably, corporate insiders and national politicians).