Company Takeovers Research Articles

Justification of the Sources of Forming Competitive Advantages of Underground Construction Companies under the Production Concentration Conditions

Under the conditions of economic and political instability characterized by the strengthening of production and resource concentration on the verge of the monopolization of the separate segments of the construction sector, the primary task of a construction company is to provide stable and innovative competitive advantages. The authors present the assessment methodology for the competitiveness of underground construction companies and justify the competitive advantages of production and capital concentration by means of a superadditive effect. However, capital concentration poses a threat of corporate raiding. This research reveals the key features and motives of corporate raiding. Moreover, the authors give recommendations on the prevention of possible company takeovers perpetrated by raiders and development of fair competition in the underground construction.

The Financial Performance of International Takeovers of the State-owned Companies: Evidences from Indonesia after the 1997/1999 Asian Crisis

The objective of this study is to examine the financial performance of state-owned and non state-owned enterprises that were sold to foreign investors, i.e. International acquisitions, in the years 2000-2010. This research is driven by a number of controversies over the sale of Indonesian state enterprises to foreign investors that allegedly have been done under the pressure of IMF and that were suspiciously priced below the companies real market values. Many people oppose the sale because these companies carried Indonesia government bonds that were given as liquidity bailed-out during the years of crisis between the year of 1998 and 2000. Performance comparison could show whether the sale to foreign investors brought economic benefits as expected. To measure the performance of cross border acquisition this research used both accounting data and capital markets based measures. Samples were matched according to characteristics of companies being analyzed: financial (banks) institutions vs. non-financial companies and pure private vs. state-owned companies. The purposive sampling method was applied. Financial ratios and cumulative abnormal returns of fifteen acquired companies between the years 2000-2010 were examined. The final sample consists of sixty firm-year data. The results indicate that, as hypothesized, there is no performance improvement on state-owned banks acquired by foreign investors. On the other hand, state-non bank companies show significantly different improvement in performance compared to private banks and private-non bank performance. In general, these studies support the notion that politics may play role on the sale of state-owned bank after crisis period (2000-2010). Further investigation is needed to elaborate the findings.

Off the rails: Is state ownership bad for productivity?

The performance of Indian railways in the nineteenth century provides a great context to study the effects of state ownership on productivity and other aspects of firm operations. We rely on a key feature of the institutional background whereby the colonial Government of India purchased a majority ownership stake in private railways at predetermined dates set by contracts negotiated decades before the companies came under state ownership. Controlling for individual railway fixed effects, year fixed effects, and railway-specific time trends, we find no evidence of a decline in TFP following state takeovers of private companies. Instead of reducing productivity, as the recent experiences with privatization would suggest, we find that the Government of India maintained productivity when it became the owner of railways. Government ownership influenced certain areas of operations such as the capital-labor ratio, but not others such as fares. Our results point to the conditions where state ownership is no worse than private ownership in terms of productivity.

Off the Rails: Is State Ownership Bad for Productivity

The performance of Indian railways in the nineteenth century provides a great context to study the effects of state ownership on productivity and other aspects of operations. We rely on a key feature of the institutional background whereby the Government of India purchased a majority ownership stake in private railways at predetermined dates set by contracts negotiated decades before the companies came under state ownership. Controlling for individual railway fixed effects, year fixed effects, and railway-specific time trends, we find no evidence of a decline in TFP following state takeovers of private companies. Instead of reducing productivity, as the recent experiences with privatization would suggest, we find that the Government of India maintained productivity when it became the owner of railways. Government ownership influenced certain areas of operations such as the capital-labor ratio, but not others such as fares. This suggests the state was able to achieve similar productivity without following the blueprint of private companies.

The Legal Practice of Corporate Takeover and Mandatory Tender Offer (MTO) in the Indonesian Capital Market

The number of takeover transactions is relatively less compared to other corporate actions by publicly-listed companies, (e.g. IPOs, rights issues, or material transactions). There is no research that explains or contextualizes this fact, but one may speculate that this may be due to (a) the existence of block-holders in Indonesia’s corporate structure profile (structural barrier) or (b) because it is costly to carry out a takeover in light of the existing Mandatory Tender Offer (MTO) requirements (legal barrier). This article focuses on the latter problem, aiming to address the practical and legal issues pertaining to takeover transactions in Indonesia with respect to the existence of the MTO. Pursuant to the prevailing rule, in a takeover of publicly-listed companies that results in a change of control, a MTO/mandatory bid requirement must be followed with the potential acquirer making an offer to purchase all of the remaining shares of the target company according to a certain minimum price formula. Specifically the article discusses practical and creative strategies that prospective controllers employ to avoid the mandatory bid/MTO requirement, and how these strategies impact the principle of minority shareholders’ protection.

China’s direct investment in the European Union: a new regulatory challenge?

While China is fast becoming an important outward direct investor, its companies are showing an increasing interest to locate in Europe and the European Union (EU). It has been suggested that this can partly be explained by the more lenient attitude of the European countries compared to the US, where some acquisitions were abandoned when they ran into political opposition based on security concerns. Yet, also in Europe, the media follow rather closely each new Chinese entry, and certain politicians have started to criticise the take-over of technology-oriented companies, especially by Chinese state-owned firms. Against the background of a very open foreign direct investment (FDI) policy as measured by OECD FDI Restrictiveness Index for the EU and the individual countries, an overview is given of the pre- and post-establishment obstacles to direct foreign investment. Also, the EU policy measures that directly or indirectly deal with incoming direct investment are discussed. Within the context of the EU competition policy and the merger regulation, the EU Commission has cleared five cases of take-over by Chinese state-owned enterprises. Although the Lisbon Treaty authorises the EU Commission to take charge of investment policy as part of the EU commercial policy, it will take time to realise this. If the announced negotiations about an investment treaty between China and the EU could work out the necessary balance, it would be an important step in achieving more reciprocity between their respective investment regimes.

公司收购中企业社会责任问题

对公司收购施以社会责任之要求，事实上构成了对公司收购的一种阻碍，这与长久以来立法将公司收购市场作为公司治理的重要机制之一，促进公司收购市场发展，发挥其增进资本流动和管理层经营效率等作用的宗旨却有所背离。目前各国纷纷效仿的英美公司收购立法，对于公司收购中社会责任的价值判断，体现于对不同利益冲突的具体权衡之中，其核心是在公司和股东利益与利益相关者利益之间寻求平衡点。我国近年来有关公司立法一方面强化了公司和股东利益保护，另一方面，也引入了公司社会责任的理念。我国对公司目标的定位与美国相同，但又采纳了英国股东单独决定收购要约的模式，实际免除了管理层对利益相关者的信托义务。实践中对于国有股权、产业发展、经济安全和“民族品牌”的保护尤为重视，为利益相关者采取收购防御措施的很少，通过非法律途径的居多，内部人控制严重问题与国有资产管理体制的缺陷结合起来，实际演变成目标公司董事会与收购者之争。建议增加管理层的话语权、强化管理层的信托责任并借鉴西方成熟的司法规则，减少公司收购中不规范的利益诉求方式。Considering CSR is a kind of block in company takeover, CSR as a common tool of takeover defense in practice deviates from the legal aim to promote company takeover market and takes advantage of its function in company governance. Nowadays, company takeover law in USA and UK are fol-lowed by most countries to help finding the value of CSR and balancing different interests in judicial judgment. In recent years, China’s company legislation drew into CSR while intensifying the protection of company and shareholders, and learned both from USA and UK in company takeover aim and decision model, which in fact excused the management from duties for stakeholders. In China’s practice, it was paid more attention in protecting state owned shares, industry development, economic safe and national brands, and less in takeover defense for stakeholders through legal ways. Inner control and problems in system of state owned assets, triggered the fighting between the board of directors in target company and the acquirer. It is proposed to increase the power of management in company takeover and consolidate their duties for stakeholder to decrease the nonstandard claims in company takeovers.

Takeovers and Countering Short-Termism in Target Boardrooms

This two-part article considers the extent to which UK company law and takeover regulation may have contributed to the supposed short-termism exercised by target directors in takeovers, that is, target directors focusing only on short-term financial gain to the current shareholders, rather than the target’s long-term wealth creation. This article argues that general company law and takeover regulation do not mandate target directors to strictly prioritise the short-term financial interests of the company when determining whether to recommend a particular takeover bid. While company law and takeover regulation require the target board to consider stakeholders’ interests, neither shareholders nor stakeholders have an enforceable right of action against the directors in connection with their failure to do so.

Industry Update: the Latest Developments in Therapeutic Delivery

The present industry update covers the period 1–30 June 2013, with information sourced from company press releases, regulatory and patent agencies as well as the scientific literature. A number of takeovers of drug delivery specialty companies by big pharma (Pearl Therapeutics by AstraZeneca, MicroDose Therapeutx by Teva), could be observed indicating that the business model of specialty delivery solutions supplementing the pipelines of classical pharmaceutical entities appears to work. Also, one sees substantial investments from equity investors in companies such as Ocular Therapeutics and Mercator MedSystems, as well as government funds (University of Pennsylvania, Oramed Pharmaceuticals) into drug-delivery start-ups, paving the way from ideas to products. Furthermore, an ever increasing number of solutions from the field of nanomedicine are entering the field of drug delivery, mainly preclinical to date, but steadily emerging towards clinical applications such as those published by the Garvan Institute, Svaya Nanotechnologies, Nanosystems Initiative Munich, University of Bern and others

‘The British boss is gone and will never return’: Communist takeovers of British companies in Shanghai (1949–1954)

AbstractIn May 1949 the Chinese Communist Party seized Shanghai. Rather than being elated at the prospect of harnessing the economic power of China's largest city to complete the revolution, the Communists approached it cautiously. How would the Chinese Communist Party set about transforming this free-wheeling port city with a ‘semi-colonial’ past into an orderly and socialist city? How would it balance ideology and pragmatism in reshaping Shanghai? This paper uses the takeover of two British companies as case studies to explore these issues at the ground level. It is argued that the means by which these companies were transformed tell us much about the Party and its state-building policies. When cadres entered foreign companies, their priority was not radical change and anti-imperialism, but rather fostering a sense of stability and unity to avoid disrupting production. Their gradual approach was due in large part to the Party's awareness of its own limited skills, resources and manpower, but also to its leaders and cadres recognizing that before they could remake Shanghai anew they had first to deal with the material and human legacies of the past.

Vertical integration, choice of the strategic development of the mining companies

Vertical integration is one of the options of strategic development for the mining companies. It results from specific needs of a basic company and means the takeover of an outside company involved in one part of the production chain. In the mining industry, the integration may concern mining–processing or mining–processing–metallurgical operations. A decision about the best strategic option should be based on economic premises. This paper proposes a new method of the economic evaluation of strategic activity of mining companies, aimed to improve the management methods, in order to create new structures and to provide the continuous development. Strategy of backward vertical integration towards suppliers, giving new possibilities and allowing for efficient company management, was discussed as one of possible options. Advantages offered by this option are significant since they consist in taking over the majority of production process as well as give the means to control the delivery of the raw materials and products. The method of evaluation the vertical integration profitability presented in the paper may be one of the tools supporting the strategic decisions.

Defensive Strategies Against Hostile Takeovers. The Analysis of Selected Case Studies

Since the 1970s and 1980s mergers and acquisitions (M&A) have been a regular part of the American capital market. As the American capital market is considered to be the most developed one in the world, processes that take place there started to occur at other markets, including the Polish market. One of the most interesting aspect of M&A is the issue of hostile takeover, which is a situation when the takeover occurs against the will of existing company's board of directors and its current shareholders. Th e aim of this article is to present the possible strategies, which can be used by resisting companies against hostile takeovers, and the assessment of their infl uence on a company in the context its restructurisation. In the part devoted to the analysis of cases, description of three processes of hostile takeovers is presented. Each of these took place at a diff erent market and, which is the most important feature, each of these ended with diff erent re- sult. Th e discussed cases encompass the unsuccessful takeover of Gillette company at the American market, the attempt at takeover of Th yssen by Krupp-Hoesch, which resulted in a merger, and the history of the hostile takeover of Kruk company by Vistula. Th e below analysis enabled to assess the defensive strategies in the context of restruc- turing results, which occur in the situation of hostile takeovers.

VIEW AND MANAGEMENT OF INNOVATIVENESS UPON SUCCESSION IN FAMILY-OWNED SMEs

The purpose of this paper is to provide insights into how the successors of family-owned manufacturing SMEs view and manage innovativeness. Research into company takeovers mainly focuses on large companies and little is known about innovativeness in research on family-owned businesses, often SMEs. This paper presents findings from ten company successions, five of which describe family successions and five external ones. The paper points to that there is little difference in how various types of successor view and manage innovativeness. A successor is chosen with care and this also influences the view and management of innovativeness; other criteria seem to apply in the succession and radical changes can only be introduced if a number of contextual factors are managed properly. The paper also indicates that while financial constraints may limit innovations, a strong financial situation is not an antecedent for innovativeness.

When Do Groups Perform Better than Individuals? A Company Takeover Experiment

It is still an open question when groups will perform better than individuals in intellectual tasks. We report that in a company takeover experiment, groups placed better bids than individuals and substantially reduced the winner’s curse. This improvement was mostly due to peer pressure over the minority opinion and to group learning. Learning took place from interacting and negotiating consensus with others, not simply from observing their bids. When there was disagreement within a group, what prevailed was not the best proposal but the one of the majority. Groups underperformed with respect to a “truth wins” benchmark although they outperformed individuals deciding in isolation.

Corporate Venture Capital and the Returns to Acquiring Portfolio Companies

A prominent motive for corporate venture capital (CVC) is the identification of entrepreneurial-firm acquisition opportunities. Consistent with this view, we find that one of every five startups purchased by 61 top corporate investors from 1987 through 2003 is a venture portfolio company of its acquirer. Surprisingly, our analysis reveals that takeovers of portfolio companies destroy significant value for shareholders of acquisitive CVC investors, even though these same investors are “good acquirers” of other entrepreneurial firms. We explore numerous explanations for these puzzling findings, which seem rooted in managerial overconfidence or agency problems at the program level.

Corporate venture capital and the returns to acquiring portfolio companies

A prominent motive for corporate venture capital (CVC) is the identification of entrepreneurial-firm acquisition opportunities. Consistent with this view, we find that one of every five startups purchased by 61 top corporate investors from 1987 through 2003 is a venture portfolio company of its acquirer. Surprisingly, our analysis reveals that takeovers of portfolio companies destroy significant value for shareholders of acquisitive CVC investors, even though these same investors are “good acquirers” of other entrepreneurial firms. We explore numerous explanations for these puzzling findings, which seem rooted in managerial overconfidence or agency problems at the program level.

Brief Lives: Three British Telegraph Companies 1850–56

The historiography of the electric telegraph in the UK rests completely on Kieve's 1973 book Electric Telegraph. However Kieve relied entirely on secondary literature which was heavily oriented toward the Electric Telegraph Company almost ignoring its competitors. This paper, which is based entirely on original research, focuses on those competitors. There were originally three companies: two formed by users to serve neglected markets, and one by an engineer who felt he could provide a better technological solution. The engineer, Edward Highton, started earlier than the others although commenced service last. Jacob and John Brett are best known for laying the world's first submarine cable, from Dover to Calais. This paper shows, however, that they also connected Liverpool and Manchester to Dover and then, in a reverse takeover of Highton's company added service to Yorkshire, Scotland, and Ireland. Alarmed by the continued significant losses of Highton's company they sold out to the third company, based in Liverpool to form the British & Irish Magnetic Telegraph Company. This company then formed a duopoly of telegraph companies that served the UK market for many years.

Auctions with toeholds: An experimental study of company takeovers

We run experiments on English Auctions where the bidders already own a part (toehold) of the good for sale. The theory predicts a very strong (“explosive”) effect of even small toeholds. While asymmetric toeholds do have an effect on bids and revenues in the lab, which gets stronger the larger the asymmetry, it is not nearly as strong as predicted. We explain this by analyzing the flatness of the payoff functions, which leads to large deviations from the equilibrium strategies being relatively costless. This is a general fundamental weakness of this type of explosive equilibria, which makes them fail when human players are involved. Our analysis shows that a levels of reasoning model explains the results better where this equilibrium fails. Moreover, we find that although big toeholds can be effective in a takeover battle, the cost to acquire them might be higher than the strategic benefit they bring.

The Agency Problem in the Merger of Vistula & Wólczanka Ltd. and W. Kruk Ltd.

The article discusses the behavior of company bodies and possible conflicts of interests occurring among them during company takeover. In this context, the insider management model, popular in Poland, is discussed. Its implications have been presented using the example of the merger between Vistula & Wólczanka Ltd. and W. Kruk Ltd.

ZIMBABWE: Foreign Company Takeover

Africa Research Bulletin: Economic, Financial and Technical SeriesVolume 45, Issue 2 p. 17739A-17740A ZIMBABWE: Foreign Company Takeover First published: 04 April 2008 https://doi.org/10.1111/j.1467-6346.2008.01520.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat No abstract is available for this article. Volume45, Issue2April 2008Pages 17739A-17740A RelatedInformation