Question

Are corporate takeovers always negative for the form being acquired? What steps can management take to avoid them?

Answer 1

Corporate takeovers are such where one company who is stronger than the other company acquires all the shareholders or it can be said that the share holdings of the shareholders changes from one company to the other.
Takeovers are such where the control ot the firm is transferred. Also there is a change in controlling interest.
Corporate takeovers can be done through friendly acquisition or through hostile, bid.

It cannot be said that corporate takeovers are always negative for the form being acquired. It is because sometimes takeovers done to save the winding up of the company. Such corporate takeovers helps the winding company to regain its working and improve the business.

Corporate takeovers can be avoided :

• If the management maintain its assets and liabilities.
• Provides good profit every year.
• If the management is able to increase the cost of takeover then what the acquirer is willing to pay.