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Hostile takeovers are a high-stakes occasion that can leave a lasting mark on the corporate landscape. The company that is buying the company tries to take over the target company despite the wishes and demands of the board. Despite their publicity and drama, hostile takeovers are not as prevalent as they once were.
During the 1980s there were a total of 160 hostile takeover bids. Board members lived in fear from “corporate raiders” like Carl Icahn. These events were widely reported, often leading to lengthy negotiations, which were mud-slinging.
An example of this is the acquisition of Cadbury in 2009 by Kraft Foods Inc. It was the biggest hostile acquisition in the history of the company and workers in the UK were furious at the prospect of losing their jobs. Cadbury’s management resisted the offer and claimed that it was not worth the value of the company. Kraft offered a sweeter deal and eventually bought the confectionery giant.
Another notable case is the takeover by KKR of Airgas in the year 2010. It was a hostile takeover of an industrial gas company and was one of the largest leveraged buyouts of the time. The media frenzy escalated, and the deal was ultimately in a lengthy legal battle.
Elon Musk’s acquisition of Twitter in 2022 is an example from the past. This hostile takeover entailed the use a poison pill defense, leading to a tumultuous negotiation as well as a massive policy changes after the acquisition. This was a case where a strategic acquisition was able overcome the hostile takeover battle. It illustrates how important it is to have a well developed plan to avoid unwanted offers.
