Protecting Shareholders from Themselves: How the United Kingdom’s 2011 Takeover Code Amendments Hit their Mark

Kraft’s takeover of Cadbury in 2011 caused considerable uproar in the United Kingdom. The political outcry caused significant amendments to the United Kingdom’s regulatory framework over mergers and acquisitions, the so-called, Takeover Code. These changes to the Takeover Code were made to help relieve pressure on target companies during takeover situations, and to correct the imbalance of power in favor of bidding companies that the political community had perceived during the Kraft-Cadbury takeover. After the changes were made, but before they were implemented, the business community expressed concern that these added regulations would be detrimental to the M&A market as a whole, and thereby harm shareholders in target companies. This comment attempts to argue that changes are, and will continue to be beneficial and were crafted so as to ensure a similar robustness in the M&A market as the pre-amendment regulatory regime. The comment explores the political climate that led to the amendments, the history of the Takeover Code and the changes themselves. It then argues the amendments will, for the most part, achieve their desired effect without all of the problems envisioned by the critics of the amendments