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 situations.

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 more complicated...