Defensive Acquisition

defensive acquisition

A firm or an asset purchased by a potential target of a takeover in order to make itself less desirable to raiders. For example, a target company might purchase another firm engaged in the same business as the raider in order to create an antitrust problem for the raider. See also raider, target company.

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Defensive Acquisition

An acquisition that a company makes in order to keep from being taken over. For example, if Company A may acquire a much smaller Company B, which will make Company A so large that any takeover will result in the acquirer running afoul of antitrust laws. A defensive acquisition most commonly applies to acquiring a company, but it may also involve acquiring a particular product that will make the company more difficult to take over. It is an example of an antitakeover measure.