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Target Company

Target Company.webp

Key Highlights

  • A target company is a business that another company, called the "acquirer," wants to buy or merge with.

  • The target company is the one being pursued for a buyout or merger.

What is Target Company?

A target company is a business that another company, called the "acquirer," wants to buy or merge with.

Key Points

  • What It Is: The target company is the one being pursued for a buyout or merger. The acquirer might offer to buy its shares or assets, often at a higher price than the market value to convince shareholders to sell.

  • Friendly or Hostile: A deal is "friendly" if the target’s management agrees to it, or "hostile" if they don’t and the acquirer tries to buy it anyway.

  • Why It Happens: Companies target others to gain valuable assets, technology, customers, or market share that can help them grow or compete better.

  • Due Diligence: Before sealing the deal, the acquirer checks the target’s finances, operations, and risks to make sure it’s a good investment.

  • Defending Against Takeovers: If the target doesn’t want to be bought, it might use tactics like a "poison pill" (making the deal less appealing) or finding another buyer (a "white knight").