The Influence of Intervention Decisions on the Duration and Withdrawal of Hostile Takeovers

Understanding the factors that may impact the duration and successful completion of a
hostile acquisition is crucial, as a lengthy deal could increase the complexity and
unpredictability of the process for both the target company and the acquirer. In the event
of a failed hostile takeover, there could be substantial financial, temporal, and manpower
losses for involved parties. Previous research has mainly concentrated on investigating
the impact of either macro or micro level factors on the duration and successful
completion of friendly takeovers. Yet there is a notable dearth of academic research in
the field of International Business related to hostile takeovers. Drawing on the theoretical
frameworks of institutional theory, agency theory, and stakeholder theory, this thesis
gathers empirical data regarding 1,434 hostile takeover deals between 1996 and 2020.
The main objective of this thesis is to analyse the impact of both national-level and
stakeholder-level factors on the duration and successful completion of hostile takeovers
within a global context.
The findings of this thesis indicate that factors at the national and stakeholder levels can
both affect the duration of a hostile takeover. In particular, the duration is reduced at the
national level when the target country provides stronger legal protection for minority
shareholders. Stakeholder-level outcomes demonstrate that target shareholder
intervention can lengthen the duration of a hostile takeover significantly. Furthermore,
director intervention can result in an extended duration for the process of a hostile
takeover. It is noteworthy that both active and passive government interventions can have
a significant and positive effect on the duration of a hostile takeover. The completion
likelihood of hostile acquisitions can be influenced by both national-level and
stakeholder-level factors, as seen by the results of withdrawn hostile takeovers. At the
national level, the hostile takeover is more likely to be withdrawn when minority
shareholders in the target country receive greater legal protection. The stakeholder-level
outcome suggests that the interventions made by shareholders of the target firm, who are
essential stakeholders in the company, can have a significant effect on increasing the
successful completion of hostile acquisitions.