Takeover

Takeover for Achieving Growth

Definition:

A takeover is a strategic business move that involves one company, typically a larger one, acquiring another company, often against the will or without the cooperation of the target company. It is a form of corporate consolidation used to achieve growth.

Example: Kraft Foods' acquisition of Cadbury in early 2010 for £12 billion is an illustration of a takeover.

Hostile Nature:

Takeovers are generally more hostile and adversarial compared to mergers. In a takeover, the acquiring company may pursue the acquisition even if the target company is unwilling to be bought out.

Acquiring Rivals:

Companies undertake takeovers to buy out their rivals, often to gain a competitive edge in the market, expand their market share, or eliminate competition.

Example: A pharmaceutical giant may launch a takeover bid for a smaller research-based biotech company to access its innovative drug pipeline.

Strategic Growth:

Takeovers are a means of achieving growth by incorporating the assets, resources, and operations of the acquired company into the acquiring company's portfolio.

Financial Transaction:

Takeovers usually involve a significant financial transaction, with the acquiring company paying a sum, often in cash or stock, to the shareholders of the target company in exchange for ownership.

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Takeover

Summary:

In summary, a takeover is a strategic business move in which one company, typically larger and often against the will of the target company, acquires another company to achieve growth. This hostile acquisition involves buying out rivals and can result in the integration of assets and operations to enhance competitiveness and market share.