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(Check out How Stocks and the Stock Market Work for more information.)Ī stock confers a share of ownership in the company that issued it. That is, they have issued stock that can be bought and sold on public stock markets. How can someone buy something that's not for sale? Hostile takeovers only work with publicly traded companies. However, just like a merger, the boards or owners of both companies have agreed to the transaction.Ī hostile takeover is an acquisition in which the company being purchased doesn't want to be purchased, or doesn't want to be purchased by the particular buyer that is making a bid. The buying company owns all assets, including the name of the company, their equipment, their personnel and even their patents and other intellectual property. The purchased company ceases to exist, or it becomes a part of the buying company. In an acquisition, one company purchases another. The key is that both companies have agreed to the merge. Like any business deal, this can be straightforward, or incredibly complex. The original companies cease to exist, and a new company forms, combining the personnel and assets of the merging companies.
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When two companies merge, the boards of directors (or the owners, if it is a privately held company) come to an agreement. In "Other People's Money," Danny deVito plays a ruthless corporate raider bent on taking over a family-run company.