The scheme of arrangement is the structure of choice in the
UK's buoyant M&A market, in part because of the sizable tax
savings available. Liquidity, funded by private equity and debt
markets, is high and many public bids are becoming competitive.
This has implications for the mechanisms the Panel on Takeovers
and Mergers has in place for the resolution of competitive
In April 2007 Tata Steel acquired Corus Group by way of a
scheme of arrangement. It was a competitive bid, culminating in
a Panel auction to resolve a competitive process.
Schemes of arrangement Six of the last seven largest
takeovers of UK targets involved schemes of arrangement:
Scottish Power (£11.6 billion), Alliance Boots
(£10.6 billion), Reuters Group (£8.6 billion),
Gallaher (£7.5 billion), Corus (£6.2 billion) and
Hanson (£6 billion). The Panel has always retained
flexibility in applying the Takeover Code to schemes due to the