General take over:
Takeover of Partnership/ Proprietorship Firm: The Company (Private or Public) may take over any existing partnership/ proprietorship firm by executing a takeover agreement with the firm and thereafter can carry on the business of the said firm in the name of the company.
Technical Takeover (Public Listed Companies):
When an acquiring company makes a bid for a target company. If the takeover goes through, the acquiring company becomes responsible for all of the target company’s operations, holdings and debt. When the target is a publicly traded company, the acquiring company will make an offer for all of the target’s outstanding shares. A takeover is virtually the same as an acquisition, except that “takeover” has a negative connotation, indicating the target does not wish to be purchased. Why would one company want to buy another company against that company’s will? The bidder might be seeking to increase its market share or to achieve economies of scale that will help it reduce its costs and thereby increase its profits. Companies that make attractive takeover targets include those that have a unique niche in a particular product or service, small companies with viable products or services but insufficient financing, a similar company in close geographic proximity where combining forces could improve efficiency and otherwise viable companies that are paying too much for debt that could be refinanced at a lower cost if a larger company with better credit took over.
Types of takeover:
- Friendly takeovers
- Hostile takeovers
- Reverse takeovers
- Backflip takeovers