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Global CEO Magazine:
Hostile takeovers and defenses
 
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Takeovers are mostly associated with the negative side of business. And, more often than not the target company employs all possible ways to avoid it. With the use of what are called takeover defense mechanisms, discussed at length in this article, the target companies try to build a shield around them. But not all takeovers are forced or thrust upon the target company- some companies mutually agree to face business uncertainties together.

The corporate world today is functioning on the "Two heads are better than one" concept. The tune of the day seems to be buying or be bought over by some company. This virus has spread into every industry right from the departmental stores viz. the Kmart and Sears to the intangible software industry viz. Oracle and Peoplesoft. In the recent past the outsourcing industry was the one which has experienced innumerable mergers, acquisitions and takeovers viz. Transworks by Aditya Birla Group, Daksh by IBM, etc. But one important thing to note is not all the companies were interested in being taken over. Why is that so? What do they do to shield themselves? One fascinating fact about these business strategies is that the terminologies coined in this area are so metaphoric that it enables easy understanding in congruence with simple analogies.

 
 
 

 

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