A takeover of a public company is the purchase of one company whose shares are listed on a stock exchange by another. Empirical evidence on takeovers suggests that they generally create value. The question is why have the UK and U.S- two countries with ostensibly similar systems of corportate governance taking different routes when it comes to regulating takeovers. A rich analysis draws from each country’s historical development, focusing on the shareholder-oriented regulations in the UK and the defence managerial tactics employed in the U.S. This paper would critically analyse the views of the writers of the “Divergence of U.S and UK Takeover Regulation” written by Armour and Skeel JR, both well seasoned Professors of Law, a thorough analysis would be made of hostile takeovers and the reasons why takeover tactics in the UK is regarded as a better option.

An analytical framework would be used explain the diversity in the systems of takeover in the UK and the U.S. subordinate lawmakers such as Judges have had the herculean task of filling the unintended vacuum and consequences of legislation in the two countries that had other objectives at the time of enactment. An examination of the way regulations took shape in the UK and the U.S as the goal is to gain an understanding of the defensive tactics adopted and used frequently in the U.S but is frowned at and has dire consequences if adopted in the UK. Earlier case examples from each jurisdiction would be analysed to gain understanding of why different takeover regulations are used. “In the UK, defensive tactics by target managers are prohibited, whereas in the U.S, Delaware law gives managers a good deal of room to manoeuvre” [1] . The primary focus of this essay is to provide a simple yet thorough framework to understanding defence tactics, what it is; why it is so successful in the U.S and is prohibited in the UK. Clearly the two ways of takeover regulations appear to work fairly well in each jurisdiction and despite the authors of the articles view one must never forget that because the UK methods seem more share holder oriented and works very well, it does not mean there is any anything wrong with the method used in the U.S.