A Hostile Takeover occurs when one company attempts to acquire another without the consent or approval of the target companyís management or board of directors. Unlike friendly mergers or acquisitions, a hostile takeover is executed directly through the target companyís shareholders, often by purchasing a controlling stake or making a public offer to buy shares at a premium price.

In simple terms, a hostile takeover bypasses the usual negotiation process. The acquiring companyóalso known as the bidderóbelieves the target companyís management is unwilling to sell, undervaluing the business, or not acting in the best interests of shareholders. To gain control, the bidder may use strategies such as a tender offer (offering to buy shares directly from shareholders) or a proxy fight (persuading shareholders to vote out existing management in favor of new leadership supportive of the acquisition).

Hostile takeovers are often seen in highly competitive or undervalued sectors where companies seek rapid expansion or access to new markets. However, such takeovers can lead to conflicts, uncertainty, and operational challenges. Target companies often adopt defensive strategies such as the ìpoison pill,î ìgolden parachute,î or ìwhite knightî approach to deter or counter the acquisition attempt.

While hostile takeovers can potentially unlock shareholder value by improving efficiency or management, they also carry risksósuch as cultural clashes, employee dissatisfaction, and high acquisition costs. In India, all takeover activities are governed by the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, which ensure transparency, protect investor interests, and maintain fair market practices during mergers and acquisitions.