· Take over

The acquisition of ownership or control a corporation, typically accomplished by a purchase of shares or assets, a tender offer, or a merger

· Buyout

The purchase of all or a controlling percentage of the assets or shares of a business

· Proxy contest

A proxy contest occurs when the acquiring company attempts to convince shareholders to use their vote rights to install new management that is open to the take over

· Acquisition

The gaining of possession or control over something, shares, assets, or others

· Merger

The absorption of one firm by another. The acquiring firm retains its name and identity, and it acquires all of the assets and liabilities of the acquired firm. After the merger, the acquired firm ceases to exist as a separate legal entity.

· Consolidation

The same as a merger except than an entirely new firm is created. Both the acquiring and acquired firms terminate their previous legal existence and become part oh the new firm.

II. Take Over Scheme

III. Typical Acquisition

· Horizontal acquisition

Acquisition of a firm in the same industry as the acquiring firm. The complete with each other in their product market.

· Vertical acquisition

Involves firms at different steps of the production process.

· Conglomerate acquisition

The acquiring firm and acquired firm are not related to each other

IV. Purposes of Acquisition

· Internal acquisition

- to be more focused in the core business

- to streamline the organization structure and achieve efficiency level

- to obtain tax benefits

- to attract investors and financers, etc.

· External acquisition

- to obtain bigger market share

- to reduce competition

- to obtain important government license

- to obtain new technology or brand names

- to obtain tax benefits

- to obtain expert or management team

- to enter into a new market

- to build strategic alliances

- to obtain efficiency

- to attract investors and financers, etc.

Reference:

1. Arief Soerowidjojo, “Basic Understanding of Acquisition,” (Presentation materials in Contract Drafting class, Faculty of Law University of Indonesia, Depok, October 10^th 2006).

2. “Proxy Contest Definition,” http://www.investorwords.com/3921/proxy_contest. html, May 18^th 2009.