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  • Daniel Rodriguez

What’s a takeover mean in California?

Companies in California and throughout the country may agree to be acquired by other firms for various reasons. Occasionally, businesses are required to sell their assets in the future. However, there is also a chance that ownership changes hands without input or permission from the company’s leadership.

Understanding takeovers

As a general rule, any merger or acquisition can is a takeover as long as it is successful. A successful takeover means an outside entity becomes the majority owner of the company it has acquired. Members of the acquired business may remain with the new entity to provide expertise after a merger or acquisition has been completed. In addition, investors in the acquired company may have their shares converted to an ownership stake in the company that received it.

Friendly and hostile takeovers

When a business voluntarily sells a majority stake in the company to another party, it is a friendly takeover. In such a scenario, the terms of the deal are typically worked out in advance and receive the blessing of each entity’s investors and corporate leaders. On the other hand, a hostile takeover occurs when one entity buys a majority stake in the company with the blessing of shareholders but without the approval of the acquired entity’s corporate leaders.

If you are interested in selling your business, it may be a good idea to do so with the help of financial or other advisers. Advisers may make it easier to perform adequate due diligence before a sale, which may help you close a deal confidently. It may also increase the chances that your shareholders will be on board with being acquired by another entity.

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