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

Forthcoming in Oxford Handbook on Corporate Law and Governance

42 Pages Posted: 8 Jul 2014 Last revised: 12 Aug 2014

John C. Coates, IV

Harvard Law School

Date Written: July 7, 2014

Abstract

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.

Keywords: Mergers, Acquisitions, Restructuring, Corporate Law and Governance, Corporate Law, Securities Law, Listing Standards, Antitrust and Foreign Investment Law

JEL Classification: D23, D70, D82, F21, G32, G34, G38, K21, K22, K23, K41

Suggested Citation

Coates, IV, John C., Mergers, Acquisitions and Restructuring: Types, Regulation, and Patterns of Practice (July 7, 2014). Forthcoming in Oxford Handbook on Corporate Law and Governance. Available at SSRN: https://ssrn.com/abstract=2463251

John C. Coates (Contact Author)

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

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