Why so many Corporate Takeovers?
There are a number of possible reasons for corporate
takeovers. Some of the most common are:
- Expanding into a new market sector by buying a company that already has a strong position in that market
- By combining the strengths of the two companies, greater growth (and profits) are possible than either company could achieve separately
- Eliminating competition by purchasing it
- Bidding companies may takeover companies to gain access to their products, services or geographical coverage
In the end, it all comes down to profit - either increasing it or defending
it from the competition.
Are There Rules for Takeovers?
You'll be relieved to know that there are some fairly strict rules about takeovers in the UK.
In 1968, the Panel on Takeovers & Mergers was set up and they are still responsible for overseeing takeover activity today.
One of the most important rules for small private investors (like you) is that all shareholders in a company being taken over must be treated equally.
For example, the company bidding can't make different offers to different groups of shareholders - something that would certainly happen otherwise.
f you would like to learn more about the activities of
the UK Panel on Takeovers
Read on Rough
Guide to Corporate Takeovers
Do I Get Paid For My Shares?
Are There So Many Takeovers?
for UK Corporate Takeovers