A takeover is an action by a corporation to assume control of a target firm. This is done by buying either all or most of the target's ownership stakes. Takeovers can either be friendly and favorable, or unwelcome and hostile in which case the owners of the target company tend to do anything they can to prevent the takeover.
Typically takeovers are undertaken in order to expand into a new sector or to grow within the sector (i.e. increase market share). For example, if a logging firm has one competitor in the surrounding area, they may simply buy the competitor and run a monopoly business.
Related Terms
