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Economic and legal analysis of defence strategies against hostile takeovers in the German market

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Economic and legal analysis of defence strategies against hostile takeovers in the German market

Due to the economic weakening of companies as a result of the COVID-19 pandemic, it is expected that the activities on the takeover market will increase in the future. Chinese companies in particular are expected to play an important role. The takeover market is a highly regulated legal area under German law and every takeover is therefore accom- panied by a time-consuming and cost-intensive process. Of the expected takeovers, the majority will be friendly takeovers, but not every takeover will be consensual. The aim of this thesis is to analyse the appropriateness of measures taken by companies to fend off a hostile takeover from a legal and economic perspective and to recommend a course of action. The work, which is based on theoretical literature, explains the fundamentals of hostile takeovers, such as the German capital market, which the takeover market is part of. Subsequently, the legal framework of hostile takeovers is explained and the process as well as the financing of the takeover are explained. The measures are explained and incorporated into this framework. The WpÜG already severely restricts the measures, most of which originate in the United States of America, especially through §33 WpÜG, and thus often lose their deterrent factor. This showed that it is not possible to define a recommendation for action that is suitable for all companies. Rather, the particularities of the individual companies, especially their financial strength, must be taken into account and included in the strategy. It is advisable to assess the current market and the risk potential on a permanent basis and to prepare measures in advance in order to be prepared in the event of a potential bid.

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