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How does it work and what are they going to do about it?
Shareholder capitalism allows boards of directors to recommend or reject takeovers from other companies. On the other hand, stakeholder capitalism can be used to limit the impact of corporate takeovers on large and often well-loved domestic firms.
But even here, the increased global nature of capital movement has made governments consider new ways of protecting the ownership of businesses. Protectionism in continental Europe has become increasingly common, with governments making emergency law to take action against acquisitive firms:
- The French Government has banned foreign takeovers in some strategic sectors. It arranged a merger between two companies, Suez and Gaz de France, in order to defend the firms against a takeover by Enel, an Italian firm.
- The Spanish Government issued an emergency decree to create a state body to prevent E.ON's £20 bn offer for Endesa, a power company.
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