Capital control and capital markets

A proposed directive offered by the European Union is designed to enhance the ability of companies to engage in merger and acquisition activity in Europe. However, these authors take issue not only with whether the directive would accomplish this task, but also with whether the directive would actually make it more difficult for takeovers to take place. The issue of whether or not takeovers are good or bad for the companies and economies involved is not addressed at length.

The authors conclude that the three main points of the proposed directive, including universal bid pricing, mandatory 100 percent bids, and information access to the public, would, in fact, make acquisitions more difficult to achieve and thus not meet the stated goals of the directive. Given that acquisitions are an effective way of redistributing assets, and that the European environment is shifting in favor of this type of activity, the authors come out against the directive as meeting these goals.

Advances in technology, communication and transportation in recent years have created an international market where

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995, p. 500). From here, the authors examine why other means are not adequate to supply the capital control that a takeover offers. They consider the role that bankers could play in particular, but conclude that the opposing motivations that bankers have, balancing the desire to have short-term debt repaid against even long-term equity positions in companies, to put the bankers in an untenable position which may well result in not taking action in the best long-term interest of companies. This can be the case even when the bank holds an equity position in the company in question. The bulk of the article is spent discussing three tenets of the proposed directive, including universal bid offerings, mandatory bids and information access. Carefully examining each of these central facets of the proposed directive, the authors conclude that the directive would not achieve the stated goal of increasing the number of takeovers in Europe, but indeed, might well result in fewer takeovers. This is because there are large numbers of companies which have only one or two major stockholders since in Europe, as opposed to the United States, the capital markets are not widely diversified and do not have the same breadth of shareholder intere
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Some common words found in the essay are:
Authors' Argument, Strengths Weaknesses, European Union, Key Takeovers, United European, Article Advances, Beamish Makino, Thirteenth Directive, Michael Milken, Law Review, capital markets, proposed directive, hostile takeovers, capital control, business environment, international capital, international capital markets, takeover offers, takeovers companies, takeover attempt, proposed directive including, equity position, journal international business, business studies pp, international business studies,
Approximate Word count = 1600
Approximate Pages = 6 (250 words per page)

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