Mergers and the Evolution of Patterns of Corporate Ownership and Control: The British Experience

Abstract

An intense academic debate has arisen recently concerning the crucial bedrock that underpins a corporate governance regime where widely-held public companies dominate. In the discourse, little has been said about the contribution of merger activity. The paper seeks to address this gap by considering developments in the United Kingdom during the 20th century. The British experience suggests that mergers matter with respect to the evolution of systems of ownership and control and that the manner in which anti-competitive behaviour is regulated influences the extent to which transformative merger activity takes place. The paper acknowledges that the competitive advantages associated with operating on a large scale and the buoyancy of the stock market can influence the pace of corporate amalgamation but argues that in the UK neither factor had a decisive influence on the evolution of share ownership arrangements.

Keywords: ownership structure, mergers, acquisitions, antitrust law, corporate law

JEL Classification: G30, G32, G34, K21, K22, L41, N43