Hostile Takeovers :: GCSE Business Marketing Coursework

hateful TakeoversA impertinent takeover is defined as an acquisition of a firm disrespect resistance by the target firms management and board of directors. This occurs when a gruelinger business absorbs another company against the target companys will. Hostile takeovers are most likely to occur when a firms stock is undervalued relative to its potential because of poor management. Generally, the managers of the targeted firm are fired. This gives managers a strong incentive to take actions designed to maximize stock prices. How do hostile takeovers impact business, judicature, and society? Businesses, especially the targeted company, are greatly affected by hostile takeovers. Prior to takeovers, targeted companies are chastised by customers, competitors, and the communities in which they reside because of inadequate management, low or undervalued stock prices, etc. These takeovers are most likely to occur when a firms stock is undervalued relative to its potential because of poor leadership of the management team. Because of this, the managers of the targeted firm are generally fired after the merger is complete. The establishment has been heavily involved with hostile takeovers, as well as horizontal and vertical mergers. The Sherman antitrust Act of 1890 was presumably the first real act of government interference regarding takeovers. This act stated the following Section 1 Every contract, combination in the form of trust or otherwise, or conspiracy, in breastwork or trade commerce among the several States, or with foreign nations, is hereby declared to be illegal. Section 2 Every person who shall monopolize, or commence to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerceshall be deemed guilty of a felonyThe antitrust laws that have followed the Sherman Antitrust Act of 1890 are as follows Clayton Act of 1914 Federal Trade Commission Act of 1914 Robinson-Patman Ac t of 1936 Hart-Scott-Rodino Antitrust Improvement Act of 1976Hostile takeovers can also affect society. People in communities often become mixed up in merger battles when a target firm is a major employer that provides a towns economic livelihood. If the takeover of a major employer occurs, this could lead to very high unemployment, topical anaesthetic business privation, etc. If you think that Kohlbert, Kravis and Roberts spent some cash acquiring RJR Nabisco - $24 Billion think again.