takeover

A takeover in corporate finance is the acquisition of a controlling interest in a target company by another party, typically by purchasing a majority of voting shares or otherwise obtaining the power to appoint a majority of the board. Takeovers may be friendly, with the target's management and board supporting the deal, or hostile, where the acquirer seeks control despite opposition. A takeover differs from a merger, which is usually a negotiated combination of equals or near-equals.

Methods include tender offers to shareholders, where the acquirer offers to buy shares at a premium; proxy contests to replace directors; and acquisitions of assets or shares on the open market. Structures include full acquisitions, partial stakes, or leveraged arrangements. In some cases, a creeping or gradual accumulation occurs over time to reach control.

Defenses and governance: Defenders employ poison pills or rights plans, staggered boards, dual-class stock, greenmail, or white knights. Regulators enforce disclosure, fair dealing, and antitrust review. Directors owe fiduciary duties to shareholders and must consider employee impact, market consequences, and long-term value.

Outcomes and context: Takeovers can unlock value through synergies, improved efficiency, or strategic refocusing, but may destroy value if the deal is overpriced or poorly integrated. They are a core feature of corporate governance and capital markets, influencing competition, ownership dispersion, and corporate strategy across industries and jurisdictions.