Definition:

A hostile takeover is a corporate action in which a company acquires a majority of the shares of another company without the target company’s management’s consent. It is a type of acquisition in which the acquirer makes an unsolicited offer to purchase a company without the target company’s management’s approval.

Process:

1. Identify a target: The acquirer identifies a company that is vulnerable to a takeover or that has strategic value.
2. Gather support: The acquirer acquires a large block of shares, often through a tender offer or a private placement.
3. Make an offer: The acquirer makes an unsolicited offer to acquire the target company at a premium to its current market price.
4. Unseat the target’s management: If the offer is accepted, the acquirer’s management takes control of the target company.
5. Restructure the target: The acquirer may restructure the target company’s operations or management.
6. Integrate the companies: The acquirer and the target company are combined into a single entity.

Types of Hostile Takeovers:

• Tender offer: An unsolicited offer to purchase a company’s shares publicly through a tender offer.
• Proxy battle: A contest to gain control of a company’s board of directors through a proxy solicitation.
• Poison pill: A defensive strategy used by a target company to deter an acquirer.

Advantages for the acquirer:

• Gaining control of a target company without its management’s consent.
• Accessing the target company’s assets and technologies.
• Expanding market share and market reach.
• Increasing profitability.

Disadvantages for the acquirer:

• High cost of acquisition.
• Integration challenges.
• Potential for resistance from the target company’s management.
• Damage to the acquirer’s reputation.

Examples:

• Microsoft’s acquisition of Nokia in 2014.
• Oracle’s acquisition of Sun Microsystems in 2006.

Note: Hostile takeovers can be complex and contentious events, and the specific circumstances of each case will vary.