1. In an
acquisition, a provision in a
charter allowing the acquiring company to
buy out all minority
shareholders in the
target company for a fair
price for a limited period of time. The freeze out provision usually lasts from two to five years following the acquisition.
2. A situation in which the majority
shareholder(s) of a company pressure
minority shareholders to
sell their
holdings. For instance, majority shareholders may conduct a freeze out by completely shutting minority shareholders out of the decision making process or by withholding pertinent (but not legally required) information.