Hostile takeovers may be a high-risk affair that leaves a lasting impression the corporate landscape. The company that acquires the business tries to acquire the target company against the wishes and expectations of the board. Despite their drama and public nature, hostile takeovers are not as common as they once were.
In the 1980s, there were over 160 hostile takeover offers. Board members were frightened by “corporate raiders” like Carl Icahn. These events were widely reported and often resulted in lengthy, mud-slinging negotiations.
A good example is the acquisition of Cadbury in 2009 by Kraft Foods Inc. This was the biggest hostile takeover in the history of the company at the time, and it sparked outrage amongst UK workers worried about losing their jobs to foreign ownership. Cadbury’s management was against the deal and claimed that it was not worth the value of the firm. In the end, however, Kraft sweetened the offer and purchased the confectionery giant.
Another notable instance is the takeover by KKR of Airgas in the year 2010. This hostile takeover of an industrial gas provider was one of the largest leveraged acquisitions of the time. The media frenzy grew and the deal ended up in a lengthy legal dispute.
Elon Musk’s acquisition Twitter in 2022 is a more recent example. This hostile takeover involved the use of a poison pill defence and led to a heated negotiation and sweeping policy changes after the acquisition. This is an example of how an acquisition with a strategic plan was able to overcome the hostile takeover battle. It illustrates how important it is to have a well developed strategy to fight off unwanted offers.
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