What is the difference between a friendly and hostile takeover?

A friendly takeover occurs when the targeted company’s board of directors and shareholders voluntarily agree to the merger or acquisition. The acquiring company must make a “friendly” offer by having an open dialogue between the two parties, and the target company must accept the offer for a successful takeover to occur. This type of takeover is the most beneficial for both parties, as the target company retains control over their corporate identity and the acquiring company maintains a sense of stability during the process. On the other hand, a hostile takeover occurs when the targeted company’s board of directors and shareholders do not agree to the acquisition. The acquiring company takes a more aggressive approach by making offers to the shareholders of the target company, instead of offering it to the board of directors. More often than not, hostile takeovers result in the acquiring company gaining control over the target company’s identity and the target company losing their sense of independence. In the District of Columbia, mergers and acquisitions must be conducted in accordance with the District of Columbia’s Merger and Acquisition statutes. These statutes are designed to protect both the acquiring and the target company. They outline the process for both friendly and hostile takeovers, as well as the legal guidelines which must be followed in order for either type of takeover to be successful.

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What is the difference between a friendly and hostile takeover?

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