Hostile Takeover Landscape: Analysing Cultural and Regulatory Differences, Corporate Governance and Ownership Structures in Sweden and the US

Abstract: This thesis aims to provide a comprehensive analysis of the cultural, regulatory, corporate, and ownership structure approaches to hostile takeovers in Sweden and the United States. It focuses on the recent Twitter takeover as a case study from a Swedish perspective, as it is a relevant example of the larger landscape of hostile takeovers. Our aim is to identify the challenges and opportunities faced by companies involved in hostile takeovers, providing insights that will inform corporate managers and policy debates on corporate governance, regulation, and investor protection. In order to examine this topic, we conducted qualitative interviews with lawyers and analysts from Sweden and the US as the primary research method to collect data. We found that the US has a higher occurrence of hostile takeovers than Sweden, which can be attributed to the more cut-throat market where shareholder activism is much more prevalent. Additionally, regulatory factors such as the fair treatment principle and corporate governance factors, especially the dual share structures, have resulted in higher voting power and more concentrated ownership that avoids dispersed voices and directionless ownership. Moreover, we identify a high level of shareholder protection in Sweden, where family-owned companies are more concerned with long-term investments and not usually interested in short-term gains, which has played a role in the less occurrence of takeovers in the country. The research findings demonstrate the need for companies to adopt proactive long-term planning, communication and transparency measures to avoid being the target of hostile bids and provide valuable insights for policymakers, corporate managers, and shareholders who aim to improve investor protection and corporate governance in the context of hostile takeovers.