Introduction
Takeover slang is a term commonly used in the business world to describe the acquisition of one company by another. It involves one company buying a controlling interest in another company, thereby gaining control over its operations, assets, and management. Takeovers can take various forms, including mergers, acquisitions, and hostile takeovers.
Types of Takeovers
There are two main types of takeovers: friendly takeovers and hostile takeovers. Friendly takeovers occur when the target company’s management and board of directors agree to the acquisition and support the transaction. In contrast, hostile takeovers involve the acquirer bypassing the target company’s management and board to directly approach shareholders with a buyout offer.
Another form of takeover is a merger, where two companies combine to form a new entity. This can be a horizontal merger, where two companies in the same industry merge, or a vertical merger, where companies in different stages of the supply chain merge.
Examples of Takeovers
One of the most famous takeovers in recent history is Disney’s acquisition of 21st Century Fox in 2019. Disney purchased most of Fox’s assets, including its film and television studios, for $71.3 billion. This takeover was a friendly deal that was approved by both companies’ boards.
Another notable takeover was Facebook’s acquisition of Instagram in 2012 for $1 billion. This acquisition allowed Facebook to expand its presence in the social media space and reach a younger audience.
Case Studies
- Microsoft’s Acquisition of LinkedIn: In 2016, Microsoft acquired LinkedIn, the professional social networking platform, for $26.2 billion. This takeover aimed to integrate LinkedIn’s network of professionals with Microsoft’s suite of productivity tools.
- Amazon’s Acquisition of Whole Foods: In 2017, Amazon acquired Whole Foods, the grocery store chain, for $13.7 billion. This takeover allowed Amazon to enter the brick-and-mortar retail space and expand its grocery delivery services.
Statistics on Takeovers
According to data from Statista, the total value of global mergers and acquisitions in 2020 was $3.6 trillion. The technology sector accounted for the largest share of M&A activity, followed by the healthcare and financial sectors.
Conclusion
Takeovers play a crucial role in shaping the business landscape by allowing companies to expand their reach, enter new markets, and gain access to valuable assets and resources. Whether friendly or hostile, takeovers are a common strategy used by companies to achieve growth and competitive advantage in today’s dynamic business environment.
