14.1 Introduction
A striking feature of the post-war business scene, throughout the world but particu-
larly in the UK, is the extent of the use of various corporate restructuring devices. This
feature has become more evident over time, perhaps promoted by the emergence of
increasingly sophisticated techniques for achieving corporate restructures.
Changes in the economic environment and in the objectives being pursued by a par-
ticular business may be seen by that business as necessitating significant changes in
its structure. Such changes may be concerned with the assets employed or with the
manner in which those assets are financed, or with some combination of both of
these. Whatever the precise nature of a particular corporate restructuring, logically
it should be pursued to work towards the achievement of the business’s objectives.
On the assumption that the business’s major financial objective is the maximisation
of the shareholders’ wealth, it is against that objective that the effectiveness of any
particular restructuring should be assessed. Corporate restructuring is clearly a nec-
essary and desirable feature of any dynamic and flexible economic environment.
Despite the bad publicity that has attached to some aspects of certain corporate
restructures, corporate restructuring is in essence a means for businesses to pursue
their legitimate objectives.Corporate restructuring (including
takeovers and divestments)
In this chapter we shall deal with the following:
‘the nature of corporate restructuring
‘the background to mergers
‘the technicalities of mergers
‘the regulation of mergers in the UK
‘the economic success of mergers
‘divestments and the various means of achieving them
‘the means of financing divestmentsChapter 14