Distribution of global M&A deals 2008-2012, by type
The statistic shows the breakdown of global M&A deals from 2008 to 2012, by type. In the first half of 2012, 2.4 percent of all M&A deals were classed as hostile bids. Hostile M&A deals are those made despite opposition expressed by the directors of the target company.
Hostile acquisitions
Mergers and acquisitions is an important and highly lucrative aspect of corporate strategy, management and corporate finance. M&A sector deals with the buying, selling and conglomeration of different companies or entities with the aim of helping an organization grow rapidly within its sector. M&A deals are highly complicated processes that rely on the investment and advice of investment banks.
Although the terms ‘merger’ and ‘acquisition’ are often used interchangeably they are quite different. It is often the legal definition to which people refer in order to gain an insight into the two terms. An acquisition is a takeover, a situation in which one company, generally the larger of the two, establishes itself as the new owner. The acquirer company may not own one hundred percent of the assets or equity but the figure will be somewhere in that region.
Acquisitions are notoriously complicated processes and often fail. In the main, this is generally down to the fact of whether or not the acquisition is friendly or hostile. If a bid is considered to be hostile, it means that the target company management are unwilling to agree to the terms of the takeover. There are a number of solutions that can be explored should the company wishing to make the acquisition be willing to proceed. The terms of the offer could be changed to combat the concerns of the takeover. Alternatively, a tender offer can be made, meaning that the shareholders of the target enterprise are publicly invited to tender their stock for sale, which the acquirer will then purchase from them with the inclusion of a premium over the market price. Another tactic which could be employed is that of a ‘proxy fight’, whereby the acquirer attempts to persuade enough shareholders that agree with the terms of the bid to replace the members of management that do not.
Mergers and acquisitions is an important and highly lucrative aspect of corporate strategy, management and corporate finance. M&A sector deals with the buying, selling and conglomeration of different companies or entities with the aim of helping an organization grow rapidly within its sector. M&A deals are highly complicated processes that rely on the investment and advice of investment banks.
Although the terms ‘merger’ and ‘acquisition’ are often used interchangeably they are quite different. It is often the legal definition to which people refer in order to gain an insight into the two terms. An acquisition is a takeover, a situation in which one company, generally the larger of the two, establishes itself as the new owner. The acquirer company may not own one hundred percent of the assets or equity but the figure will be somewhere in that region.
Acquisitions are notoriously complicated processes and often fail. In the main, this is generally down to the fact of whether or not the acquisition is friendly or hostile. If a bid is considered to be hostile, it means that the target company management are unwilling to agree to the terms of the takeover. There are a number of solutions that can be explored should the company wishing to make the acquisition be willing to proceed. The terms of the offer could be changed to combat the concerns of the takeover. Alternatively, a tender offer can be made, meaning that the shareholders of the target enterprise are publicly invited to tender their stock for sale, which the acquirer will then purchase from them with the inclusion of a premium over the market price. Another tactic which could be employed is that of a ‘proxy fight’, whereby the acquirer attempts to persuade enough shareholders that agree with the terms of the bid to replace the members of management that do not.
