Data Bases • Custom Term Papers • Free Term Papers • Free Research Papers • Free Essays • Free Book Reports • Plagiarism? Links • Top 100 Term Paper Sites • Top 25 Essay Sites • Top 50 Essay Sites • Search 97,000 Papers @ DirectEssays.com • Search 101,000 Papers @ ExampleEssays.com • Search 90,000 Papers @ MegaEssays.com Free Essays • Term Paper Sites • Chuck III's Free Essays • Free College Essays • TermPaperSites.com • My Term Papers • Get Free Essays • Essay World • Planet Papers	Search Lots of Essays Back to Subjects - Business Hostile Takeovers Hostile Takeovers A hostile takeover is defined as an acquisition of a firm despite resistance by the target firm’s management and board of directors. This occurs when a stronger business absorbs another company against the target company’s will. Hostile takeovers are most likely to occur when a firm’s stock is undervalued relative to its potential because of poor management. Generally, the managers of the targeted firm are fired. This gives managers a strong incentive to take actions designed to maximize stock prices. How do hostile takeovers impact business, government, and society? Businesses, especially the targeted company, are greatly affected by hostile takeovers. Prior to takeovers, targeted companies are chastised by customers, competitors, and the communities in which they reside because of inadequate management, low or undervalued stock prices, etc. These takeovers are most likely to occur when a firm’s stock is undervalued relative to its potential because of poor leadership of the management team. Because of this, the managers of the targeted firm are generally fired after the merger is complete. The government has been heavily involved with hostile takeovers, as well as horizontal and vertical mergers. The Sherman Antitrust Act of 1890 was presumably the first real act of government interference regarding takeovers. This act stated the following:  Section 1: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint or trade commerce among the several States, or with foreign nations, is hereby declared to be illegal.  Section 2: Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce…shall be deemed guilty of a felony… The antitrust laws that have followed the Sherman Antitrust Act of 1890 are as follows:  Federal Trade Commission Act of 1914  Robinson-Patman Act of 1936  Hart-Scott-Rodino Antitrust Improvement Act of 1976 Hostile takeovers can also affect society. People in communities often become mixed up in merger battles when a target firm is a major employer that provides a town’s economic livelihood. If the takeover of a major employer occurs, this could lead to very high unemployment, local business privation, etc. If you think that Kohlbert, Kravis and Roberts spent some cash acquiring RJR Nabisco - $24 Billion – think again. The ten largest mergers and acquisitions have occurred in the past two and a half years. The smallest of these ten is almost three times that of the KKR – RJR Nabisco deal. The ten largest “Big Deals”: Acquirer Target Date Ranked value America Online Inc. Time Warner Jan. 10, '00 Vodafone AirTouch PLC Mannesmann AG Nov. 14, '99 MCI WorldCom Sprint Corp. Oct. 5, '99 Pfizer Inc. Warner-Lambert Co. Nov. 4, '99 Exxon Corp. Mobil Corp. Dec. 1, '98 American Home Products Corp. Warner-Lambert Co. Nov. 4, '99 Travelers Group Inc. Citicorp April 6, '98 SBC Communications Inc. Ameritech Corp. May 11, '98 Bell Atlantic Corp. GTE Corp. July 28, '98 AT&T Corp. Tele-Communications Inc. June 24, '98 SOURCE: Thomson Financial Securities Data & 2000 The Washington Post Company Bibliography: Word Count: 533
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