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So Called ‘Cadbury Law’ Due to Make Company Takeovers Harder

If you have ever been a shareholder in a company that has been taken over under hostile negotiations, you will know how difficult it can be. The Code Committee is however going to make this more difficult to do, since they are aiming to change the rules so that the company which could be taken over will be in the driving seat.

The takeover of the British based firm Cadbury by the American giant Kraft caused much upset and bad feeling when it occurred earlier in 2010. This event led to a rethink of how companies can be taken over when the situation is a hostile one. I certainly think the law does need to be changed so the advantage is firmly in the court of the British born company, otherwise any number of other companies could go the same way.

Various different steps have been suggested to ensure that the situation will be different in future. The Code Committee did not take on all the suggestions that were made to it however. Until another takeover is broached in the future, we won’t know how effective the new measures will truly be in reality.

I felt disappointed at the way Cadbury was taken over and although certain promises were made by Kraft, not all of them were eventually held to be true. British companies do seem to be easier to take over than companies in some other countries, so hopefully the new rules will change this and make British firms more protected.

If you have any concerns about your company or its potential future, you can contact us at St Matthew for help and advice now.



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