Poison Pill Plans: Research on Legal Regulation, Market Effects, and Localization Paths

Abstract

As a key defense mechanism against hostile takeovers in mature capital markets, poison pill plans have significantly influenced the market for corporate control. This paper reviews the theoretical foundations, international regulatory practice, and governance implications of such plans. Against the backdrop of China’s registration-based reform and increasing ownership dispersion among listed companies, it examines the growing demand for effective anti-takeover mechanisms and the limitations of existing tools. Drawing on international experience and representative cases, the study explores the feasibility and localization of this approach in China. The findings indicate that China has both the practical need and institutional basis for introducing poison pill plans. A localized framework should be established through improved legislation, stronger supervision, enhanced corporate governance, and effective risk-control mechanisms. Such a framework can balance takeover efficiency with investor protection while supporting the modernization of corporate governance.