Abstract

When one firm obtains the voting shares of another corporation, either directly or indirectly, with the object of acquiring control over its management it is known as a ‘takeover’. This process either occurs in a friendly or in a hostile manner. In the case of a hostile takeover, the acquirer obtains the corporation against the desire of the target company and the latter often makes attempts to dissuade the acquirer from taking over. In fact, these measures are frequently used as a leverage by target corporations in negotiations for larger offers. Some of these defenses are regulated strictly in India in comparison to others. Despite India’s commercial boardrooms making several billion-dollar advancements in negotiating favorable agreements, the hostile takeover activities have been rather dormant. Moreover, India’s business terminology is full of examples showing how the majority of hostile takeover efforts have been successfully averted. Through this paper, the researcher would attempt to: firstly, evaluate the conceptual viability of making hostile takeovers in India, as well as the defenses that local target companies may use to prevent such transactions; secondly, understand hostile takeovers vis-à-vis Takeovers Code, 2011 while shedding light upon its anti-acquirer nature; thirdly, examine the current barriers to hostile takeover activities in the country, including dominant promoter ownership and regulatory limits on obtaining finance and lastly, discuss the inefficiency of the defenses which renders the target firms in a vulnerable position against hostile bidders.

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