Takeovers and acquisitions are quite common in the business world. In laymen terms, takeover, and acquisition have the same meaning, but both have a somewhat different meaning. If you look at business buy-sell platforms like Businesses Buy Sell, located in Canada, you will find a number of businesses on business for sale list. But it can be a little difficult whether it is for takeover or acquisition.
What is Takeover?
A takeover is a distinctivepractice of acquisition that happens when a businessis bought by another business without the consent of directors or executives of the business that has been taken over. Takeovers that take place without the approval are normallytermed as hostile takeovers. Takeover and Acquisition are very alike and in both the cases, one company will buy another company for a contracted amount, either in cash or by acquiring a particular number of shares.
Hostile takeovers take place without the agreement of the management team of the acquired company. Thehostile takeover comprises the buyer firmacquiring another company through anopen offer or proxy battle. In a tender offer, an investor or a buyer offers to buy shares from every or majority of stakeholder of a publicly listed company for a specified price and in a specified time to become the owner of the company. In proxy battle, the buyer coaxes shareholders to vote out the management team of the company so that the buyer can easily takeover the company.
Defending The Company From The Hostile Takeover
When a company tries to takeover another company without consent of the management team, the target company canapply defensive strategies to avert a hostile takeover. Underrated public companies are furthersusceptible to hostile takeovers, as the public possesses the bulk of the shares of the company. To evade the hostile takeover, the target company can buy its own majority of the shares from the market. A company can also file an anti-trust charge against the buyer company or reorganizethe assets and liabilities of the company to thwartthe financial benefits of the acquiring company.
What is Acquisition?
An acquisition is a procedure where both buying and selling parties agree with the terms and conditions of the acquisition agreement. In the acquisition procedure, the buyer will be eligible to acquire all the tangible and intangible assets of the company. In most of the cases, once the acquisition procedure is completed, the selling company will be completely taken over by the buyer company. It is a kind of friendly takeover. As a potential buyer, you can find various business for sale in the markets of Canada.
Define Acquisition Procedure
In the initial stage, the potential buyer develops a plan and investigates the financial position of the company he or she wants to acquire. During the next stage,the buyer or the professionals hired by the buyerevaluate the value of the target company to figure out the accurate worth of the company. After figuring out the price of the target company, the buyer must find the means to finance the acquisition and once the funds are arranged and both buyer and seller agrees with the terms and conditions of the purchase sale agreement, the deal is signed and the ownership is transferred.
Difference BetweenTakeover And Acquisition
Even though, Acquisitions and takeovers are rather same, they are still quite different. Both acquisitions and takeovers comprise of purchases of one company by another company. The only difference between the two is that a takeover can be done in a hostile manner, where an acquisition is generallydone with mutual consent of both buyer and seller. To know more about acquisition of a business for sale in Canada, you can visit Businesses Buy Sell.