A Legal Perspective of Hostile Takeover Defensive Measures in China and Malaysia

This paper analyses the past and present developments in hostile takeovers in China and Malaysia. Takeovers and mergers, including hostile takeovers, may be advantageous to the target companies and the economy as a whole. Some defensive measures nevertheless may be allowed to minimize the negative impact of takeovers. The paper highlights the fact that in both jurisdictions there are some anti-takeover measures either initiated and implemented by the corporations concerned, or those which are introduced by the respective states for certain purposes. Those measures are defensive measures or regulatory responses by the respective states to hostile takeovers in China and Malaysia. While Malaysia has more liberalized laws than China as a result of the more open market, both jurisdictions still have strict rules and regulations which are, by nature, unfavorable to hostile takeover attempts, albeit in the name of national interests. The analysis also shows that there are laws which protect the target companies from the negative impact of hostile takeovers, at the transnational or national levels. More open laws are suggested for striking a balance between the negative and positive impacts of takeovers, especially when dealing with hostile takeovers, which would benefit both jurisdictions.