Target Company

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").