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Merger and acquisitions to get harder in UK?

Companies may find completing an acquisition could be tougher in the future.

19 September 2011

Merger and acquisition business negotiations may become tougher in the future.

This is because the Panel on Takeovers and Mergers - an independent body established in 1968 - has amended rules regarding deals.

Due to the changes, it could be harder for UK companies to complete agreements, as they will only have 28 days to make an offer after they have been revealed.

The existing rules allowed bidders to remain anonymous as the sales negotiations went on.

Mark Preston, head of UK advisory at RBC Capital Markets, told Reuters that "half a decade of bad habits and abuses in negotiating tactics" will be ended by the new regulations.

The decision to tighten up the rules comes after the uproar that greeted German food giant Kraft's decision to takeover Cadbury in 2010.

Mr Preston remarked that US and Canadian firms could be put off pursuing UK companies because of the 28-day deadline.

Posted by Edel Quinn

Source: Panel on Takeovers and Mergers press release and Reuters, September 19th

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