Hostile takeovers are high-risk event that could leave an indelible mark on the corporate landscape. The company that acquires the business tries to acquire the target company despite the wishes and demands of the board. Despite their drama and public nature, hostile takeovers are not so common as they were.
During the 1980s there were 160 hostile takeover bids. Board members were constantly in fear of “corporate raiders”, such as Carl Icahn. These incidents were widely reported, which led to lengthy and mudslinging negotiation.
One notable example is the acquisition of Cadbury in 2009 by Kraft Foods Inc. This was the biggest hostile takeover in the history of the company at the time, and it provoked anger among UK employees who were concerned about losing their jobs to foreign ownership. Cadbury’s management resisted the offer as it was considered to be low-value for the company. In the end, however, Kraft sweetened the offer and took over the confectionary giant.
Another noteworthy case is the acquisition by KKR of Airgas in 2010. This hostile takeover of an industrial gas producer was among the biggest leveraged acquisitions of that era. The media frenzy escalated, and the deal ended up in a lengthy legal battle.
A more recent example is the acquisition of Twitter by Elon Musk in 2022. This hostile takeover involved the use a poison pill defence and led to a heated negotiation and sweeping policy changes after the acquisition. This was an example of an acquisition strategy that was successful in surviving the hostile takeover battle showing how important it is for a potential firm to have a well-defined strategy to block unwanted offers.