Takeover is the process of acquiring a control over another business unit by controlling their assets, either directly or indirectly.
Generally, takeovers are done by either hostile or friendly approach. They are common in larger business units and help the external growth of a business.
The reasons for a takeover in a business are as follows −
The types of takeovers are as follows −
Friendly takeover − Takeover is done after negotiations and agreements.
Hostile takeover − Takeover is done by buying the required number of shares in a targeted company in an open market.
Bailout takeover − Takeover is done by acquiring the shares by rehabilitation scheme (financial institution) in financially sick companies.
Reverse takeover − In this type, a private company acquires the public company.
Backflip takeover − Here, the acquiring company gets the subsidiary status.
The advantages of a takeover are as follows −
The disadvantages of a takeover are as follow −
The reasons for a failure in regards to takeover are as follows −