Understanding Takeovers In A Merger And Acquisition Process
Understanding takeovers in a merger and acquisition process can be a complex issue. There are many different forms of takeovers and vocabulary to describe them. A company can look to takeover management of another company through mutual agreement. Companies can acknowledge that management would be better off if it were taken over by a more competent management team, or the companies can merge together and work together as one management team.
The most complex part of understanding takeovers in a merger and acquisition process is the different cases of takeovers that are not mutually decided. A hostile takeover is when management is not looking to change ownership, but the company asserts itself against their will.
Companies that are looking for mergers and acquisitions are usually looking to run a company together, or are happy to provide the company with the reigns to manage. When the company is being acquired and management opposes a takeover, the company employees are affected negatively.
Employees will resent the acquiring company for adjusting management against their will. Sometimes companies are forced to go through with being acquired or to merge with other companies due to financial issues. If a company is backed into a corner and has no other choice but to go through with a merger or acquisition, the company does not have a leg to stand on when it comes to providing management
This gives the acquiring firm the ability to come into the company and take over management. When understanding takeovers in a merger and acquisition process, the leverage goes to the company that is in better financial shape. If a company is desperate and looking to recover through an acquisition and merger process, it may be forced to allow a takeover in management.