Target Company

A target company or target firm is a company which is acquired by another company (the acquiring company) through a merger or acquisition.

A merger or acquisition which is likely to benefit the target company, its employees and its shareholders is known as a friendly acquisition. Friendly acquisitions are typically carried out with the approval of the target company’s management.

A merger or acquisition which is likely to negatively impact the target company and its employees is known as a hostile takeover. A hostile takeover is, in almost every case, carried out without the approval of the target company’s management.

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