Review Body on Takeovers and Mergers

Review Body on Takeovers and Mergers
Name	Review Body on Takeovers and Mergers
Formation	1970s
Purpose	Advisory and investigative review of corporate takeovers and mergers
Headquarters	London
Region served	United Kingdom
Leader title	Chair
Parent organization	Department for Business and Trade

Review Body on Takeovers and Mergers is an advisory panel established to examine the conduct, rules, and outcomes of corporate takeovers and mergers in the United Kingdom. It has informed interventions, regulatory guidance, and legislative drafting that intersect with institutions such as Companies Act 2006, Financial Conduct Authority, Competition and Markets Authority, Bank of England and European Commission. Drawing on inputs from legal advisers, market participants, and academic centres such as London School of Economics, Oxford University, and Cambridge University, the body has influenced high-profile disputes and statutory reform.

History and Establishment

The body was created in response to pressures from events that reshaped British corporate practice, including the takeover waves associated with figures like Sir James Goldsmith, Robert Maxwell, Rupert Murdoch, and episodes such as the Westland affair and the corporate restructurings of the 1980s under Margaret Thatcher. Its formation followed consultations involving institutions such as Department of Trade and Industry, Royal Commission on the Distribution of Income and Wealth, Cadbury Committee, and advisory inputs from firms like McKinsey & Company, Herbert Smith Freehills, and Linklaters. Early chairs drew on experience from bodies including Insolvency Service, Bank of England, and the Law Commission.

Mandate and Functions

Mandated to review practice and recommend rules, the body examines issues that implicate statutes such as the Companies Act 1985, European Union law, and international norms embodied by entities like International Monetary Fund, Organisation for Economic Co-operation and Development, and World Trade Organization. Its functions include conducting inquiries requested by ministers, producing white papers comparable to reports by the Monopolies and Mergers Commission and the Competition Commission, advising regulators such as the Financial Reporting Council, and proposing code provisions analogous to the City Code on Takeovers and Mergers. It also liaises with professional bodies including the Institute of Chartered Accountants in England and Wales, Bar Council, and Chartered Institute of Management Accountants.

Organizational Structure and Governance

Governed by a chair and a small panel of independent members drawn from legal, accounting, banking, and academic backgrounds — often with prior roles at institutions like High Court of Justice, Court of Appeal, House of Commons, House of Lords, or corporate boards such as BP, GlaxoSmithKline, and British Airways — the body operates with secretariat support from civil servants seconded from Her Majesty's Treasury and the Department for Business and Trade. Procedural rules reflect model practices from the Competition and Markets Authority and the European Central Bank for confidentiality, disclosures, and hearings, and it engages external consultants including firms like KPMG, Ernst & Young, and PricewaterhouseCoopers.

Key Reports and Recommendations

Notable outputs have included thematic reviews on takeover defenses reminiscent of debates around hostile takeovers involving Vickers Report-era bank restructurings, recommendations on board duties paralleling conclusions in the Cadbury Report and Greenbury Report, and analysis of cross-border deals in the spirit of inquiries by the European Commission Directorate-General for Competition. Reports addressed issues such as bidder obligations, minority shareholder protections drawn from cases like Williams v. Natural Life Health Foods Ltd. and disclosure standards similar to those advanced by the Financial Conduct Authority in listing rules. Its recommendations have informed guidance comparable to reforms embedded in the Companies Act 2006 and influenced codes administered by bodies like the London Stock Exchange.

Impact on Policy and Legislation

Findings have been taken into account in policy-making by ministers and legislators in Westminster, informing amendments to statutes comparable to the Enterprise Act 2002, and shaping regulatory practice at agencies such as the Financial Services Authority and later the Financial Conduct Authority. The body’s influence has extended into cross-border coordination with entities like the European Commission, US Securities and Exchange Commission, and Organisation for Economic Co-operation and Development working groups, affecting merger control, disclosure regimes, and director fiduciary duties. Its work has been cited in parliamentary debates in the House of Commons and House of Lords during reform of corporate governance and takeover law.

Criticisms and Controversies

Critics have argued that the body is susceptible to capture by incumbents and major professional service firms such as Allen & Overy, Freshfields Bruckhaus Deringer, and Slaughter and May, echoing concerns raised in reviews of Big Four accounting firms influence, and questioned its transparency compared with public inquiries like the Leveson Inquiry. Others have pointed to tensions with European jurisprudence exemplified by disputes before the Court of Justice of the European Union and to perceived delays mirroring critiques levied at the Competition Commission during major telecommunications and banking mergers involving BT Group and HSBC. Defenders note parallels with expert advisory models used by Bank of England committees and select committees in the House of Commons Select Committee on Business, Energy and Industrial Strategy.

Notable Cases and Reviews

The body has reviewed transactions and episodes comparable to the takeovers of companies such as Rolls-Royce Holdings, Cadbury, P&O Ferries, AstraZeneca, and contested bids associated with corporate actors like Vladimir Putin-era Russian investment controversies, cross-border bids involving Pfizer and Allergan, and domestic disputes similar to Sir Philip Green-linked corporate governance scandals. Its inquiries have intersected with forensic accounting investigations, litigation in courts such as the High Court of Justice and Court of Appeal, and regulatory scrutiny by the Competition and Markets Authority and international counterparts like the US Department of Justice.

Category:United Kingdom administrative bodies Category:Corporate governance