Question

Explain in a few sentences the scenario from start to finish of how a corporate takeover may occur.

this is the entire question.

Answer 1

Corporate Acquisition is a process in which control of one company is taken over by another company. The control can be taken over through buying more than 50% shares of another company or controlling more than half of the board of the directors of other company,This process of acquisition involves several steps which includes:-

1. Strategy formulation and profile specification:- An acquirer company strategize and formulate different filters to select a potential candidate for acquisition according to its needs.

2. Drawing up a longlist of potential candidates:- The acquirer company selects different potential candidate running the filters which fulfills different criteria.

3. Selecting and approaching candidates:- The acquirer company then selects the final few companies which it wants to acquire and approaches them.

4. Market analysis and valuation:- The acquirer company then analyses different aspects of the performance and market shares of target companies which includes analysis of oppurtunities and threats.The acquirer company also value target companies.

5. Negotiating with candidates:- Then both the parties starts to negotiate with each other regarding price and control through their representatives.

6. Letter of intent:- Letter of intent is sent if the acquiring company is interested in target companies.

7. Due diligence investigation and final negotiations:- Then due diligence investigations are carried out and final price is decided at which the target company is acquired.

8. Financing:- The acquirer company then needs to finance the acqusition either through shares or cash it can also borrow and acquire.

9. Closing and integration of the acquisition:- The acquisition deal closes, and management teams of the target and acquirer work together on the process of merging two firms and hence acquisition is complete.

So Corporate acquisition is associated with involvement of these steps.