Takeover Definition

A takeover is the purchase of one company by another. In a takeover, the target company’s shareholders are given the opportunity to sell their shares to the acquiring company at a price above the current market value. Takeovers can be friendly or hostile. Friendly takeovers are negotiated between the two companies and often result in the management of the target company being retained. Hostile takeovers are unsolicited and often involve the acquisition of a large stake in the target company by the acquirer, followed by a tender offer to buy out the remaining shareholders at a premium price.