M&A Guide ??: Part 1 - Corporate Takeover

Check the general overview of M&A in my post: https://www.dhirubhai.net/posts/eduard-grigoryan_mergers-acquisitions-consolidations-activity-7122511829838278656-G7dz?utm_source=share&utm_medium=member_desktop

When we hear "corporate takeover", it often conjures images of boardroom battles and high-stakes negotiations. But what does it really entail?

?? What is a Corporate Takeover?

It's when one company acquires a majority stake in another. This can be initiated by strategic buyers (other companies) or financial buyers (like private equity firms).

?? Friendly vs. Hostile Takeovers:

- Friendly: The target company is open to the acquisition.

- Hostile: The target company rejects the offer, but the acquirer persists, often appealing directly to shareholders.

?? The Takeover Process:

1) Tender Offer: The acquirer expresses interest.

2) Internal Discussions: The target company evaluates the offer.

3) 3rd Party Advisory: Experts are brought in for advice.

4) Negotiation: Terms, including payment methods, are discussed.

5) Shareholder Vote: The final decision lies with the shareholders.

?? Other Types of Takeovers:

- Reverse Takeover: A private company goes public by acquiring a public company.

- Back-Flip Takeover: The acquirer becomes a subsidiary of the target.

?? Risks in Corporate Takeovers:

1) Antitrust Violations: Regulatory bodies may intervene if the takeover discourages fair competition.

2) Activist Investors: They can influence other shareholders, especially if they believe the takeover isn't in the company's best interest.

3) Cross-Border M&A: International deals, especially involving certain countries, can face additional scrutiny. You can check my post about it https://www.dhirubhai.net/posts/eduard-grigoryan_currency-tax-shares-activity-7122147043187261440-YzUk?utm_source=share&utm_medium=member_desktop .

In essence, corporate takeovers are strategic moves that can reshape industries. Whether you're an investor, executive, or just curious, understanding the mechanics behind these moves is crucial in today's business world.

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