Professor of Economics
takeover regulation; corporate governance; European Union; Break-Through rule; corporate law; dual class shares;
Journal Article | European Journal of Law and Economics | | April 2004
The Impact of a Break-through Rule on European Firms
The authors analyze the impact of a 75 pct. Break-Through rule on 1,035 European firms with dual class shares. In 3–5 pct. of the firms the controlling owners incur a direct loss of control, while in another 11–17 pct. of the firms, the controlling owners are likely to incur a loss of control. Firms in Germany, Italy and the Scandinavian countries are more likely to incur a loss of control.The restrictions that the Break-Through rule put on the ability of these firms to issue new shares to outsiders without changing the control structure are also estimated.The authors conclude that a significant number of firms with dual class shares in the European Union will be affected by a 75 pct. Break-Through rule.