Tidy takeovers prevail as M&A activity picks up

Deputy Editor
Sift Media
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Mergers and acquisitions may have been relatively thin on the ground over the last 18 months, but an increasing number are being structured through tax efficient ‘schemes of arrangement’.

According to figures from City law firm Trowers & Hamlins, 37% of all takeovers of UK listed companies in the last year (to December 2009) were structured through tax efficient “schemes of arrangement” compared to just 24% of all takeovers in the previous year.

Where a takeover takes place through a scheme of arrangement with a reduction of capital, the bidder does not have to pay HMRC stamp duty at 0.5% on the overall purchase price of the company.

In such a scheme of arrangement shares in the target company are (following court approval) cancelled and re-issued to the b...

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